Document:

exv10w6

EXHIBIT 10.6

EXECUTION VERSION

SECURITY AGREEMENT

Dated as of August 4, 2009

among

THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.,

THE SUBSIDIARIES FROM TIME TO TIME PARTY HERETO

and

Wilmington Trust Company,

as Collateral Agent

 

 

TABLE OF CONTENTS*

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I

DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	Section 1.01 Definition of Terms Used Herein
	 	 	3	 
	Section 1.02 Definition of Certain Terms Used Herein
	 	 	3	 
	Section 1.03 Rules of Interpretation
	 	 	13	 
	 
	 	 	 	 
	ARTICLE II

SECURITY INTEREST
	 	 	 	 
	 
	 	 	 	 
	Section 2.01 Security Interest
	 	 	13	 
	Section 2.02 No Assumption of Liability
	 	 	13	 
	 
	 	 	 	 
	ARTICLE III

REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	 
	 	 	 	 
	Section 3.01 Title and Authority
	 	 	14	 
	Section 3.02 Filings
	 	 	14	 
	Section 3.03 Validity of Security Interest
	 	 	14	 
	Section 3.04 Absence of Other Liens
	 	 	15	 
	Section 3.05 [Reserved]
	 	 	15	 
	Section 3.06 Claims
	 	 	15	 
	Section 3.07 Instruments and Chattel Paper
	 	 	16	 
	Section 3.08 Securities Accounts and Commodity Accounts
	 	 	16	 
	Section 3.09 Electronic Chattel Paper and Transferable Records
	 	 	16	 
	Section 3.10 Fair Labor Standards Act
	 	 	16	 
	 
	 	 	 	 
	ARTICLE IV

COVENANTS
	 	 	 	 
	 
	 	 	 	 
	Section 4.01 Change of Name; Location of Collateral; Records; Place of Business
	 	 	16	 
	Section 4.02 Periodic Certification
	 	 	16	 
	Section 4.03 Protection of Security Interest
	 	 	17	 
	Section 4.04 Further Assurances
	 	 	17	 
	Section 4.05 Inspection and Verification
	 	 	18	 
	Section 4.06 Taxes; Encumbrances
	 	 	18	 
	Section 4.07 Assignment of Security Interest
	 	 	18	 
	Section 4.08 Continuing Obligations of the Grantors
	 	 	18	 
	Section 4.09 Use and Disposition of Collateral
	 	 	18	 
	Section 4.10 Limitation on Modification of Accounts
	 	 	19	 
	Section 4.11 Insurance
	 	 	19	 
	Section 4.12 Legend
	 	 	19	 
	Section 4.13 Covenants Regarding Patent, Trademark and Copyright Collateral
	 	 	19	 

 

			
	*	 	Table of Contents is not a part of the Security Agreement.

- i -

 

Table of Contents (cont.)

	 	 	 	 	 
	 	 	Page	 
	Section 4.14 Warehouse Receipts
	 	 	21	 
	Section 4.15 Claims
	 	 	21	 
	Section 4.16 Other Actions
	 	 	21	 
	Section 4.17 Joinder of Additional Grantors
	 	 	23	 
	 
	 	 	 	 
	ARTICLE V

COLLECTIONS
	 	 	 	 
	 
	 	 	 	 
	Section 5.01 Accounts
	 	 	23	 
	Section 5.02 Collections
	 	 	24	 
	Section 5.03 Power of Attorney
	 	 	25	 
	 
	 	 	 	 
	ARTICLE VI

REMEDIES
	 	 	 	 
	 
	 	 	 	 
	Section 6.01 Remedies upon Default
	 	 	26	 
	Section 6.02 Application of Proceeds
	 	 	29	 
	Section 6.03 Grant of License to Use Intellectual Property and Other Property
	 	 	29	 
	 
	 	 	 	 
	ARTICLE VII

MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 7.01 Notices
	 	 	30	 
	Section 7.02 Security Interest Absolute
	 	 	30	 
	Section 7.03 Survival of Agreement
	 	 	30	 
	Section 7.04 Binding Effect; Several Agreement
	 	 	30	 
	Section 7.05 Successors and Assigns
	 	 	30	 
	Section 7.06 Collateral Agent’s Fees and Expenses; Indemnification
	 	 	30	 
	Section 7.07 GOVERNING LAW
	 	 	31	 
	Section 7.08 Waivers; Amendment
	 	 	31	 
	Section 7.09 WAIVER OF JURY TRIAL
	 	 	32	 
	Section 7.10 Severability
	 	 	32	 
	Section 7.11 Counterparts
	 	 	32	 
	Section 7.12 Headings
	 	 	32	 
	Section 7.13 Jurisdiction; Consent to Service of Process
	 	 	32	 
	Section 7.14 Termination
	 	 	33	 
	Section 7.15 Headings and Recitals
	 	 	33	 
	Section 7.16 Intercreditor Terms Prevail
	 	 	33	 
	Section 7.17 Limitation on Duties of Collateral Agent
	 	 	33	 

Schedules:

	 	 	 	 	 
	Schedule I

	 	—
	 	Copyrights
	Schedule II

	 	—
	 	Licenses
	Schedule III

	 	—
	 	Patents
	Schedule IV

	 	—
	 	Trademarks
	Schedule V

	 	—
	 	Claims
	Schedule VI

	 	—
	 	Instruments and Chattel Paper
	Schedule VII

	 	—
	 	Securities Accounts and Commodity Accounts
	Schedule VIII

	 	—
	 	Electronic Chattel Paper and Transferable Records

- ii -

 

Exhibits:

	 	 	 
	Exhibit A

	 	Form of Accession Agreement
	Exhibit B

	 	Form of Perfection Certificate
	Exhibit C

	 	Form of Grant of Security Interest in US Patents and Trademarks
	Exhibit D

	 	Form of Grant of Security Interest in US Copyrights

- iii -

 

     SECURITY AGREEMENT (this “Agreement”) dated as of August 4, 2009, among
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. (the “Company” and a
“Grantor”), a Maryland corporation, each of the undersigned Subsidiaries of
the Company and each other Subsidiary of the Company which becomes a party hereto
(each such Subsidiary individually a “Grantor” and collectively with the
Company, the “Grantors”) and Wilmington Trust Company, as collateral agent
(together with any successor or successors in such capacity, the “Collateral
Agent”) for the benefit of the Trustee (as defined below) and the Holders (as
defined below).

          Reference is made to the 113/8% Senior Secured Notes due 2015 of the Company (as amended,
restated, supplemented or modified from time to time, the “Notes”), in the original
aggregate principal amount of $260,000,000 issued pursuant to the Indenture, dated as of August 4,
2009 (as amended, restated, amended and restated, modified or supplemented from time to time and
including any agreement extending the maturity of, refinancing or otherwise amending, amending and
restating or otherwise modifying or restructuring all or any portion of the obligations of the
Company under the Notes or such agreement or any successor agreement, the “Indenture”)
among the Company, the Grantors, the Collateral Agent and Wilmington Trust Company, as trustee
(together with any successor or successors in such capacity, the “Trustee”). Each Grantor
has, pursuant to the Indenture, unconditionally guaranteed the Obligations (as defined below).

          The Company and each other Grantor will materially benefit from the issuance of the Notes and
it is a condition to the issuance of the Notes that the Grantors execute and deliver this
Agreement.

          The Company and all direct and indirect domestic Subsidiaries of the Company that become a
party thereto from time to time (such Subsidiaries being herein collectively referred to as the
“ABL Subsidiary Borrowers”) are also parties to (i) an Amended and Restated Credit
Agreement dated as of December 27, 2007 (as amended, modified, supplemented, extended, restated,
renewed or replaced from time to time in accordance with the terms thereof including any related
notes, guarantees, collateral documents, instruments and agreements executed in connection
therewith, and as the same may be amended, restated, modified, renewed, refunded, replaced or
refinanced from time to time, regardless of whether such amendment, restatement, modification,
renewal, refunding, replacement or refinancing is with the same financial institutions or
otherwise, the “ABL Credit Agreement”) with the lenders from time to time party thereto
(the “ABL Lenders”), Bank of America, N.A., a national banking association (“Bank of
America”), as issuing bank for certain letters of credit (the “ABL L/C Issuer”), Bank
of America, acting through its Retail Finance Group (“BofA Retail Finance”), as
Administrative Agent for the ABL Lenders (together with its successor or successors in such
capacity, the “ABL Administrative Agent”), BofA Retail Finance, as Collateral Agent
(together with its successor or successors in such capacity, the “ABL Collateral Agent”),
(ii) a Security Agreement dated as of December 3, 2007 (as amended, modified, supplemented,
extended, restated, renewed or replaced from time to time in accordance with the terms thereof, the
“ABL Security Agreement”), and (iii) a Pledge Agreement dated as of December 3, 2007 (as
amended, modified, supplemented, extended, restated, renewed or replaced from time to time in
accordance with the terms thereof, the “ABL Pledge Agreement”).

          Certain ABL Lenders and their Affiliates at the time acting as Hedging Providers may from time
to time provide forward rate agreements, options, swaps, caps, floors and other hedging agreements
(the “ABL Hedging Agreements”) to the ABL Obligors (as defined below). The ABL Lenders,
the ABL L/C Issuer, the ABL Administrative Agent, each co-agent or sub-agent appointed by the ABL
Administrative Agent from time to time pursuant to the ABL Credit Agreement, the ABL Collateral
Agent, each co-agent or sub-agent appointed by the ABL Collateral Agent from time to time pursuant
to the ABL Security Agreement and each Indemnitee (as defined in the ABL Credit Agreement)

 

 

and their respective successors and assigns are herein referred to individually as an “ABL
Credit Party” and collectively as the “ABL Credit Parties” and the ABL Credit Parties,
the Hedging Providers and their respective successors and assigns are herein referred to
individually as an “ABL Secured Party” and collectively as the “ABL Secured
Parties”.

          To induce the ABL Lenders to enter into the ABL Credit Agreement and the other Loan Documents
(as defined in the ABL Credit Agreement) and the Hedging Providers to enter into the ABL Hedging
Agreements contemplated by the ABL Credit Agreement (such Loan Documents and the ABL Hedging
Agreements being herein collectively referred to as the “ABL Loan Documents”), and as a
condition precedent to the obligations of the ABL Lenders under the ABL Credit Agreement, certain
Subsidiaries of the Company who are not ABL Subsidiary Borrowers (each an “ABL Subsidiary
Guarantor” and, collectively, the “ABL Subsidiary Guarantors”) have agreed, jointly and
severally, to provide a guaranty of all obligations of the Company and the ABL Subsidiary Borrowers
under or in respect of the ABL Loan Documents. The Company, the ABL Subsidiary Borrowers and ABL
Subsidiary Guarantors are herein collectively referred to as the “ABL Obligors” and
individually as an “ABL Obligor”.

          Revolving loans and term loans (collectively, “ABL Loans”) are now and may hereafter
be outstanding under the ABL Credit Agreement. The payment of the principal of and interest on the
ABL Loans and all other Obligations (as defined in the ABL Credit Agreement and the ABL Security
Agreement, the “ABL Loan Obligations” and, together with all ABL Hedging Obligations (as
defined below), the “ABL Obligations”) are secured pursuant to the ABL Security Agreement
and various other security documents by a first priority security interest in all of the ABL
Obligors’ right, title and interest in all of their present and future personal and real property
and proceeds thereof (other than Excluded Assets as described in the ABL Loan Documents) (all such
non-excluded personal and real property and proceeds thereof being herein collectively referred to
as the “ABL Collateral”).

          The Indenture requires the Grantors to secure their obligations under the Notes and the
Indenture by a second priority security interest in the assets constituting or intended to
constitute ABL Collateral, subject to exceptions (the “Note Collateral”).

          The ABL Collateral Agent and the Collateral Agent will enter into an Intercreditor Agreement
dated as of the date hereof (as amended, restated, supplemented or modified from time to time, the
“Intercreditor Agreement”) to provide among other things that:

               (i) the ABL Loan Obligations, plus obligations on account of Cash Management Services (as
defined in the Intercreditor Agreement), ABL Hedging Obligations and obligations on account of
other Bank Products (as defined in the Intercreditor Agreement) are secured on a first priority
basis by all ABL Collateral up to the Maximum Revolving Debt Amount (as defined in the
Intercreditor Agreement);

               (ii) the Obligations are secured by the Note Collateral (which includes some, but not all, of
the assets constituting or intended to constitute ABL Collateral);

               (iii) the security interest securing the Obligations in the ABL Collateral (x) is of a second
priority subject only to the first priority security interest securing an amount of ABL Obligations
that does not exceed the Maximum Revolving Debt Amount and (y) is of a first priority with respect
to that portion of the ABL Obligations which exceeds the Maximum Revolving Debt Amount.

          Accordingly, the Grantors and the Collateral Agent, on behalf of itself and each Secured Party
(and each of their respective successors or assigns), hereby agree as follows:

 - 2 - 

 

ARTICLE I

DEFINITIONS

          Section 1.01 Definition of Terms Used Herein. Unless the context otherwise requires,
all capitalized terms used but not defined herein shall have the meanings set forth in the
Indenture, all references to the Uniform Commercial Code or “UCC” shall mean the Uniform
Commercial Code in effect in the State of New York as of the date hereof and any uncapitalized
terms used herein which are defined in the UCC have the respective meanings provided in the UCC;
provided, however, that if a term is defined in Article 9 of the Uniform Commercial
Code differently than in another Article thereof, the term shall have the meaning set forth in
Article 9, and provided further that if by reason of mandatory provisions of law,
perfection, or the effect of perfection or non-perfection, of the Security Interest in any
Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than New York, “Uniform Commercial Code” or “UCC” means the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or non-perfection or availability of
such remedy, as the case may be.

          Section 1.02 Definition of Certain Terms Used Herein. As used herein, the following
terms shall have the following meanings:

          “ABL Cash Management Requirements” shall have the meaning given that term in
Section 4.16(e) of this Agreement.

          “ABL Hedging Obligations” shall mean all Hedging Obligations (as defined in the
Indenture) of the Company or any of its Subsidiaries or Cash Management Obligations (as defined in
the Indenture) of the Company or any of its Subsidiaries in each case owing to an ABL Lender or an
Affiliate of an ABL Lender at the time of entry into such Hedging Obligations or Cash Management
Obligations.

          “Accession Agreement” shall mean an Accession Agreement, substantially in the form of
Exhibit A hereto, executed and delivered by an additional Grantor after the Issue Date
pursuant to Section 4.17 of the Indenture and/or Section 4.17 of this Agreement.

          “Accessions” shall have the meaning given that term in the UCC.

          “Account Debtor” shall mean any person who is or who may become obligated to any
Grantor under, with respect to or on account of a Receivable.

          “Accounts” shall mean “accounts” as defined in the UCC, and all right, title and
interest of any Grantor to payment for goods and services sold or leased, including any such right
evidenced by Chattel Paper, whether due or to become due, whether or not it has been earned by
performance, and whether now or hereafter acquired or arising in the future, including, without
limitation, (i) accounts receivable from Affiliates of the Grantors, (ii) health-care insurance
receivables (as defined in the UCC), and (iii) rights to payment arising out of the use of a credit
or charge card or information contained on or used with that card.

          “Accounts Receivable” shall mean all Accounts and all right, title and interest in any
returned goods, 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
security interests, liens and pledges, whether voluntary or involuntary, in each case whether now
existing or owned or hereafter arising or acquired.

 - 3 - 

 

          “Agent’s Account” shall (i) have the meaning set forth in Section 5.14(f) of the ABL
Credit Agreement; or (ii) if the ABL Obligations are no longer outstanding, mean an account of the
Collateral Agent to be notified to the Company by the Collateral Agent.

          “Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. Section 101
et seq., as amended from time to time.

          “Blocked Account Agreement” means with respect to a Blocked Account, an agreement, in
form and substance satisfactory to the Collateral Agent, establishing Control of such Blocked
Account by the Collateral Agent and whereby the Blocked Account Bank maintaining such Blocked
Account agrees, upon notification by the Collateral Agent (or any agent or bailee thereof) of the
occurrence and during the continuance of an Event of Default, to comply only with the instructions
originated by the Collateral Agent (or the ABL Collateral Agent acting as agent and bailee on
behalf of the Collateral Agent and the other Secured Parties) without the further consent of any
Grantor.

          “Blocked Account Bank” shall have the meaning given that term in Section
5.01(a) of this Agreement.

          “Blocked Accounts” shall have the meaning given that term in Section 4.16(e)
of this Agreement.

          “Blue Sky Laws” shall have the meaning given that term in Section 6.01(c) of
this Agreement.

          “Books and Records” means all instruments, files, records, ledger sheets and documents
covering or relating to any of the Collateral.

          “Chattel Paper” shall have the meaning given that term in the UCC.

          “Claims” means all “commercial tort claims” (as defined in the UCC), including,
without limitation, each of the claims described on Schedule V hereto, as such Schedule may
be amended, modified or supplemented from time to time, and also means and includes all claims,
causes of action and similar rights and interests (however characterized) of a Grantor, whether
arising in contract, tort or otherwise, and whether or not subject to any action, suit,
investigation or legal, equitable, arbitration or administrative proceedings.

          “Collateral” shall mean all personal property of each Grantor, including, without
limitation, all:

               (i) Accounts Receivable,

               (ii) Chattel Paper,

               (iii) Claims, Judgments and/or Settlements,

               (iv) Deposit Accounts and securities accounts and all cash and cash equivalents or
other assets in each such account,

               (v) Documents,

               (vi) Equipment,

 - 4 - 

 

               (vii) Fixtures,

               (viii) General Intangibles (including Payment Intangibles and Intellectual Property),

               (ix) Goods,

               (x) Instruments,

               (xi) Inventory,

               (xii) Investment Property,

               (xiii) Letter-of-Credit Rights,

               (xiv) Software,

               (xv) Supporting Obligations,

               (xvi) money, policies and certificates of insurance, deposits, cash, or other property,

               (xvii) all Books and Records and information relating to any of the foregoing ((i)
through (xvi)) and/or to the operation of any Grantor’s business, and all rights of access
to such Books and Records and information, and all property in which such Books and Records
and information are stored, recorded and maintained,

               (xviii) all insurance proceeds, refunds, and premium rebates, including, without
limitation, proceeds of fire and credit insurance, whether any of such proceeds, refunds,
and premium rebates arise out of any of the foregoing ((i) through (xvii)) or otherwise,

               (xix) all liens, guaranties, rights, remedies, and privileges pertaining to any of the
foregoing ((i) through (xviii)), including the right of stoppage in transit, and

               (xx) any of the foregoing, whether now owned or now due, or in which any Grantor has an
interest, or hereafter acquired, arising, or to become due, or in which any Grantor obtains
an interest, and all products, Proceeds, substitutions, and Accessions of or to any of the
foregoing;

provided, however, that Collateral shall not include Excluded Assets;
provided that the Proceeds from any sale, transfer or assignment or other voluntary or
involuntary disposition of such Excluded Assets, shall not be excluded from the definition of
Collateral to the extent that the assignment of such Proceeds is not prohibited or to the extent
not otherwise required to be paid to the holder of the Indebtedness secured by such Excluded
Assets; and provided, further, that the term “Collateral” as used in this Agreement
shall not include any “Collateral” as defined in the Pledge Agreement.

          “Commodity Account” shall have the meaning given that term in the UCC.

          “Commodity Intermediary” shall have the meaning given that term in the UCC.

          “Computer Hardware” means all computer and other electronic data processing hardware
of a Grantor, whether now or hereafter owned, licensed or leased by such Grantor, including,
without

 - 5 - 

 

limitation, all integrated computer systems, networks, central processing units, memory units,
display terminals, printers, features, computer elements, card readers, tape drives, hard and soft
disk drives, storage devices, cables, electrical supply hardware, generators, power equalizers,
accessories, peripheral devices and other related hardware, all documentation, flowcharts, logic
diagrams, manuals, specifications, training materials, charts and pseudo codes associated with any
of the foregoing and all options, warranties, services contracts, program services, test rights,
maintenance rights, support rights, renewal rights and indemnifications relating to any of the
foregoing.

          “Control”, with respect to (i) Deposit Accounts, shall have the meaning given that
term in Section 9-104 of the UCC; (ii) Electronic Chattel Paper, shall have the meaning given that
term in Section 9-105 of the UCC; (iii) Investment Property, shall have the meaning given the term
in Section 9-106 of the UCC; and (iv) Letter-of-Credit Rights, shall have the meaning given that
term in Section 9-107 of the UCC.

          “Copyright License” shall mean any written agreement, now or hereafter in effect,
granting any right to any third party, whether exclusive or non-exclusive, under any Copyright now
or hereafter owned by any Grantor, whether or not registered, or which such Grantor otherwise has
the right to license, or granting any right, whether exclusive or non-exclusive, to such Grantor
under any Copyright now or hereafter owned by any third party, and all rights of such Grantor under
any such agreement.

          “Copyrights” shall mean all of the following now owned or hereafter acquired by any
Grantor:

               (i) all copyright rights in any work subject to the copyright laws of the United States
or any other country (whether or not the underlying works of authorship have been
published), whether as author, assignee, transferee or otherwise, and

               (ii) all registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings, supplemental
registrations and pending applications for registration in the United States Copyright
Office, including those listed on Schedule I and any renewals and extensions
thereof,

               (iii) all Software, computer programs, web pages, computer data bases and computer
program flow diagrams, including all source codes and object codes related to any or all of
the foregoing,

               (iv) all tangible property embodying or incorporating any or all of the foregoing,
whether in completed form or in some lesser state of completion, and all masters,
duplicates, drafts, versions, variations and copies thereof, in all formats,

               (v) all claims for, and rights to sue for, past, present and future infringement of any
of the foregoing,

               (vi) all income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including, without limitation, damages and payments for
past, present or future infringements thereof and payments and damages under all Copyright
Licenses in connection therewith,

               (vii) all rights in any of the foregoing, arising under the Laws of the United States,
to copy, record, synchronize, broadcast, transmit, perform, distribute, create derivative

 - 6 - 

 

works of, and/or display any of the foregoing or any matter which is the subject of any
of the foregoing in any manner and by any process now known or hereafter devised, and

               (viii) the name and title of each Copyright item and all rights of any Grantor to the
use thereof, including, without limitation, rights protected pursuant to trademark, service
mark, unfair competition, anti-cybersquatting and/or the rules and principles of any other
applicable statute, common law or other rule or principle of law now existing or hereafter
arising.

          “Daily Receipts” shall mean all amounts received by the Company and the other
Grantors, whether in the form of cash, checks, any moneys received or receivable in respect of
charges made by means of credit cards, and other negotiable instruments, in each case as a result
of the sale of Inventory.

          “Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or
other applicable jurisdictions from time to time in effect and affecting the rights of creditors
generally.

          “De Minimis Deposit Account” shall have the meaning given that term in Section
4.16(e) of this Agreement.

          “De Minimis Deposit Amount” shall have the meaning given that term in Section
4.16(e) of this Agreement.

          “Deposit Account” shall have the meaning given that term in the UCC and shall also
include all demand, time, savings, passbook, or similar accounts maintained with a bank or other
financial institution, whether or not evidenced by an Instrument, all cash and other funds held
therein and all passbooks related thereto and all certificates and Instruments, if any, from time
to time representing, evidencing or deposited into such deposit accounts.

          “Deposit Account Control Agreement” or “DACA” shall mean with respect to a
Deposit Account, an agreement by and among the bank at which such Deposit Account is maintained,
the Grantor that is the bank’s customer with respect to such Deposit Account, and the Collateral
Agent (and which may but is not required to include the ABL Collateral Agent as a party), in form
and substance satisfactory to the Collateral Agent and in compliance with the terms of the
Intercreditor Agreement, establishing Control of such Deposit Account by the Collateral Agent and
whereby the bank maintaining such Deposit Account agrees, upon notification by the Collateral Agent
of the occurrence and during the continuance of an Event of Default, to comply only with the
instructions originated by the Collateral Agent (or the ABL Collateral Agent if the ABL Collateral
Agent is a party to such agreement), without the further consent of any Grantor. A DACA may (but
is not required to) take the form of an amended (or amended and restated) Blocked Account
Agreement.

          “Documents” shall have the meaning given that term in the UCC.

          “Electronic Chattel Paper” shall have the meaning given that term in the UCC.

          “Equipment” shall mean “equipment”, as defined in the UCC, and shall also mean all
Computer Hardware, furniture, store fixtures, motor vehicles, rolling stock, machinery, office
equipment, plant equipment, tools, dies, molds, and other goods, property, and assets which are
used and/or were purchased for use in the operation or furtherance of a Grantor’s business, and any
and all Accessions or additions thereto, and substitutions therefor.

 - 7 - 

 

          “Excluded Assets” means (i) any permit, lease, license, contract, agreement, joint
venture agreement, or other instrument to which the Company or any Grantor is a party and any
Equity Interests in a joint venture to the extent the Company or such Grantor is prohibited from
granting a Lien in its rights thereunder pursuant to the terms of such permit, lease, license,
contract, agreement, or other instrument, or the shareholder or other similar agreement governing
such joint venture, or under applicable law (other than to the extent that any restriction on such
assignment would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable
Law or principles of equity); (ii) any Excluded Equipment; (iii) any United States intent-to-use
trademark application to the extent and for so long as creation by a Grantor of a Security Interest
therein would impair the validity or enforceability of such intent-to-use trademark applications as
determined by the Company; (iv) any assets or Equity Interests acquired by the Company or any
Grantor after the date hereof in a transaction not prohibited by the Indenture to the extent such
assets or Equity Interests are subject to a Lien permitted by clauses (v) or (vi) of the definition
of “Permitted Liens” in the Indenture so long as the documents applicable to such Lien prohibit any
other Lien on such assets or Equity Interests; (v) each Principal Property (as defined in the
Indenture), except as otherwise provided under Section 4.10 of the Indenture; (vi) any property or
assets to the extent such property or assets does not constitute ABL Collateral; provided,
however, that this clause (vi) shall be applicable only at such time or times as the ABL
Credit Agreement is in effect; (vii) any voting Equity Interests of a Foreign Subsidiary in excess
of 65% of all outstanding voting Equity Interests of a first-tier Foreign Subsidiary; and (viii)
any property or assets owned by any Foreign Subsidiary.

          “Excluded Equipment” means at any date any assets of the Company or any Grantor which
are subject to a Lien securing Indebtedness permitted by clause (iv) of Section 4.08(b) of the
Indenture if and to the extent that (i) the express terms of a valid and enforceable restriction in
favor of a Person who is not the Company or a Grantor contained in the agreements or documents
granting or governing such Indebtedness prohibits, or requires any consent or establishes any other
conditions for, an assignment thereof, or a grant of a security interest therein, by the Company or
the applicable Grantor and (ii) such restriction relates only to the asset or assets acquired by
the Company or the applicable Grantor with the proceeds of such Indebtedness and attachments
thereto or substitutions therefor.

          “Financial Officer” of any Person means the chief financial officer, principal
accounting officer, treasurer, controller or any vice precident-finance, vice-president-financal
services or vice president-treasury services of such Person.

          “Financing Statement” shall have the meaning given that term in the UCC.

          “Fixtures” shall have the meaning given that term in the UCC.

          “General Intangibles” shall mean “general intangibles” as defined in the UCC, and all
choses in action and causes of action and all other assignable intangible personal property of any
Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including all
Payment Intangibles, all rights and interests in partnerships, limited partnerships, limited
liability companies and other unincorporated entities which interests do not constitutes
Securities, corporate or other business records, indemnification claims, contract rights (including
rights under personal property leases, whether entered into as lessor or lessee, hedging agreements
and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund
claims and any letter of credit, guarantee, claim, security interest or other security held by or
granted to any Grantor to secure payment by an Account Debtor of any of the Receivables.

          “Goods” shall have the meaning given that term in the UCC.

 - 8 - 

 

          “Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European Central
bank).

          “Holders” means the holders from time to time of the Notes.

          “Indemnitee” shall have the meaning given that term in Section 7.06(b) of this
Agreement.

          “Indenture” shall have the meaning given to that term in the preliminary statement of
this Agreement.

          “Intellectual Property” shall mean all intellectual and similar property of any
Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, technology,
confidential or proprietary technical and business information, know-how, show-how, data or
information, domain names, mask works, customer lists, vendor lists, subscription lists, 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.

          “Instruments” shall have the meaning given that term in the UCC.

          “Inventory” shall mean “inventory” as defined in the UCC, and all goods of any
Grantor, whether now owned or hereafter acquired, held for sale or lease, or furnished or to be
furnished by any Grantor under contracts of service, or consumed in any Grantor’s business,
including raw materials, intermediates, work in process, packaging materials, finished goods,
semi-finished inventory, scrap inventory, manufacturing supplies and spare parts, and all such
goods that have been returned to or repossessed by or on behalf of any Grantor.

          “Investment Property” shall have the meaning given that term in the UCC.

          “Judgments” shall mean all judgments, decrees, verdicts, decisions or orders issued in
resolution of or otherwise in connection with a Claim, whether or not final or subject to appeal,
and including all rights of enforcement relating thereto and any and all Proceeds thereof.

          “Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directives, requests, licenses, authorizations and permits
of, and agreements with, any Governmental Authority, in each case whether or not having the force
of law.

          “Leaseholds” means with respect to any Person all of the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or
fixtures.

          “Letter-of-Credit Right” shall have the meaning given that term in the UCC and shall
also mean any 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.

 - 9 - 

 

          “Letters of Credit” shall have the meaning given that term in the UCC.

          “License” shall mean any Patent License, Trademark License, Copyright License,
software license or other license or sublicense to which any Grantor is a party, which license or
sublicense is, or would reasonably be expected to be, material to the business, condition
(financial or otherwise) or operations of the Company and its Subsidiaries taken as a whole,
including those listed on Schedule II.

          “Note Documents” means the Indenture, the Notes, any registration rights agreement
related thereto and the Collateral Documents, in each case including all exhibits and schedules
thereto, and all other agreements, documents and instruments relating to the Notes, in each case as
the same may be amended, modified or supplemented from time to time in accordance with the
provisions thereof.

          “Obligations means, without duplication:

               (i) all principal of and interest (including, without limitation, any interest which
accrues after the commencement of any proceeding under any Debtor Relief Law with respect to
any Grantor, whether or not allowed or allowable as a claim in any such proceeding) on the
Notes;

               (ii) all fees, expenses, indemnification obligations and other amounts of whatever
nature now or hereafter payable by any Grantor (including, without limitation, any amounts
which accrue after the commencement of any proceeding under any Debtor Relief Law with
respect to any Grantor, whether or not allowed or allowable as a claim in any such
proceeding) pursuant to the Indenture, the Notes, the Intercreditor Agreement, any
Collateral Document or any other Note Document;

               (iii) all expenses of the Collateral Agent or the Trustee as to which the Collateral
Agent or the Trustee has a right to reimbursement under the Indenture or under any other
similar provision of any Collateral Document, the Intercreditor Agreement, or any other Note
Document including, without limitation, any and all sums advanced by the Collateral Agent to
preserve the Collateral or its security interest in the Collateral; and

               (iv) all other obligations or liabilities now existing or hereafter arising or incurred
(including, without limitation, any amounts which accrue after the commencement of any
Debtor Relief Law with respect to any Grantor, whether or not allowed or allowable as a
claim in any such proceeding) on the part of any Grantor pursuant to the Indenture, the
Notes, the Intercreditor Agreement, any Collateral Document or any other Note Document;

together in each case with all renewals, modifications, refinancings, consolidations or extensions
thereof.

          “Patent License” shall mean 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 any Grantor or which any Grantor otherwise has the right to license, is in
existence, or granting to any 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 any Grantor
under any such agreement.

          “Patents” shall mean all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of the United States, all registrations and recordings thereof,
and all applications for letters patent of the United States, including registrations, recordings
and pending applications in the United States Patent and Trademark Office, including those listed
on Schedule III, and (b) all reissues, continuations, divisions, continuations-in-part,
renewals or extensions thereof, and the

 - 10 - 

 

inventions disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.

          “Payment Intangible” shall have the meaning given that term in the UCC and shall also
mean any General Intangible under which the Account Debtor’s primary obligation is a monetary
obligation.

          “Perfection Certificate” shall mean a certificate substantially in the form of
Exhibit B hereto, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Financial Officer and the chief legal officer of the
Company.

          “Pledge Agreement” shall mean the Pledge Agreement, dated as of the date hereof (as
the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time
to time), among the Company, the grantors party thereto and the Collateral Agent.

          “Proceeds” shall mean “proceeds” as defined in the UCC, and any consideration received
from the sale, exchange, license, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the possession of any Collateral and
any payment received from any insurer or other person or entity as a result of the destruction,
loss, theft, damage or other involuntary conversion of whatever nature of any asset or property
which constitutes Collateral, and shall include

               (i) all cash and negotiable instruments received by or held on behalf of the Collateral
Agent pursuant to the provisions of the Indenture, this Agreement or otherwise, in respect
of any Collateral,

               (ii) in the case of Collateral constituting Intellectual Property, any claim of any
Grantor against any third party for (and the right to sue and recover for and the rights to
damages or profits due or accrued arising out of or in connection with)

               (A) past, present or future infringement of any Patent now or hereafter owned
by any Grantor, or licensed under a Patent License,

               (B) past, present or future infringement or dilution of, or any unfair
competition with, any Trademark now or hereafter owned by any Grantor or licensed
under a Trademark License or injury to the goodwill associated with or symbolized by
any Trademark now or hereafter owned by any Grantor,

               (C) past, present or future breach of any License and

               (D) past, present or future infringement of any Copyright now or hereafter
owned by any Grantor or licensed under a Copyright License and

               (iii) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.

          “Real Property” means, with respect to any Person, all of the right, title and
interest of such Person in and to land, improvements and fixtures, including Leaseholds.

          “Receivables” shall mean all Accounts, all Payment Intangibles, all Instruments, all
Chattel Paper and all Letter-of-Credit Rights.

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          “Secured Parties” shall mean

               (i) the Collateral Agent and any co-agents or sub-agents;

               (ii) the Trustee and any co-agents or sub-agents;

               (iii) the Holders;

               (iv) the beneficiaries of each indemnification obligation undertaken by any Grantor
under any Note Document, and

               (v) the successors and assigns of each of the foregoing.

          “Securities Act” shall have the meaning given that term in Section 6.01(c) of this
Agreement.

          “Securities Account” shall have the meaning given that term in the UCC.

          “Securities Intermediary” shall have the meaning given that term in the UCC.

          “Security” shall have the meaning given that term in the UCC.

          “Security Interest” shall have the meaning given that term in Section 2.01.

          “Settlements” shall mean all right, title and interest of a Grantor in, to and under
any settlement agreement or other agreement executed in settlement or compromise of any Claim,
including all rights to enforce such agreements and all payments thereunder or arising in
connection therewith.

          “Software” shall have the meaning given that term in the UCC.

          “Supporting Obligation” shall have the meaning given that term in the UCC and shall
also refer to a Letter-of-Credit Right or secondary obligation that supports the payment or
performance of an Account, Chattel Paper, a Document, a General Intangible, an Instrument, or
Investment Property.

          “Trademark License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to use any Trademark now or hereafter owned by any Grantor or
which any Grantor otherwise has the right to license, or granting to any Grantor any right to use
any Trademark now or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.

          “Trademarks” shall mean all of the following now owned or hereafter arising, used,
acquired or owned by any Grantor:

               (i) all trademarks, service marks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos, certification
marks, collective marks, brand names, trademark rights arising out of domain names, and
other identifiers of source or goodwill, along with all prints and labels on which any of
the foregoing have appeared or appear, package and other designs, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all registrations
and recordings thereof; and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the United States Patent
and Trademark Office, any State of the

 - 12 - 

 

United States, or any political subdivision thereof, and all extensions or renewals
thereof, including those listed on Schedule IV,

               (ii) all goodwill associated therewith or symbolized thereby

               (iii) all claims for, and rights to sue for, past, present or future infringements,
dilution, or unfair competition with any of the foregoing,

               (iv) all income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including, without limitation, damages and payments for
past, present or future infringements, dilution or unfair competition with any of the
foregoing and payments and damages under all Trademark Licenses in connection therewith and

               (v) all other assets, rights and interests that uniquely reflect or embody such
goodwill.

          Section 1.03 Rules of Interpretation. The rules of interpretation specified in
Section 1.03 of the Indenture shall be applicable to this Agreement.

ARTICLE II

SECURITY INTEREST

          Section 2.01 Security Interest. As security for the payment or performance, as the
case may be, in full of the Obligations, each Grantor hereby pledges to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a
security interest in, all of such Grantor’s right, title and interest in, to and under the
Collateral (the “Security Interest”). Without limiting the foregoing, each Grantor hereby
designates the Collateral Agent as such Grantor’s true and lawful attorney, exercisable by the
Collateral Agent or its nominee or custodian whether or not an Event of Default exists, with full
power of substitution, at the Collateral Agent’s option, to file one or more Financing Statements,
continuation statements, filings with the United States Patent and Trademark Office or United
States Copyright Office (or any successor office) or other documents as it determines reasonably
necessary for the purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by each Grantor, without the signature of any Grantor (each Grantor
hereby appointing the Collateral Agent as such Person’s attorney to sign such Person’s name to any
such instrument or document, whether or not an Event of Default exists), and naming any Grantor or
the Grantors as debtors and the Collateral Agent as secured party. Any such Financing Statement
may indicate the Collateral as “all assets of the Grantor”, “all personal property of the debtor”
or words of similar effect, regardless of whether any particular asset comprised in the Collateral
falls within the scope of Article 9 of the UCC.

          Section 2.02 No Assumption of Liability. The Security Interest is granted as security
only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter
or modify, any obligation or liability of any Grantor with respect to or arising out of the
Collateral.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

          The Grantors jointly and severally represent and warrant to the Collateral Agent and the
Secured Parties that:

 - 13 - 

 

          Section 3.01 Title and Authority. Each Grantor has good and valid rights in and title
to the Collateral with respect to which it has purported to grant a Security Interest hereunder and
has full power and authority to grant to the Collateral Agent the Security Interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with
the terms of this Agreement, without the consent or approval of any other Person other than any
consent or approval which has been obtained except where the failure to obtain such consent or
approval, individually or in the aggregate, could not reasonably be expected to result in a
material adverse effect on the ability of any Grantor to perform any of its obligations under the
Note Documents, the rights of or benefits available to the Collateral Agent and the Secured Parties
under any Note Document or the Collateral as a whole.

          Section 3.02 Filings. (a) The Perfection Certificate has been duly prepared,
completed and executed and the information set forth therein is correct and complete in all
material respects. Uniform Commercial Code financing statements or other appropriate filings,
recordings or registrations containing a description of the Collateral have been delivered to the
Collateral Agent or its nominee or custodian for filing in each central-filing office specified in
Schedule 6 to the Perfection Certificate, which are all the filings, recordings and registrations
(other than filings required to be made in the United States Patent and Trademark Office and the
United States Copyright Office in order to perfect the security interest in Collateral consisting
of United States Patents, Trademarks and Copyrights) that are necessary to publish notice of and
protect the validity of and to establish a legal, valid and perfected security interest in favor of
the Collateral Agent or its nominee or custodian (for the ratable benefit of the Secured Parties)
in respect of all Collateral in which the security interest may be perfected by filing, recording
or registration in the United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or
re-registration is necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements.

          (b) Fully executed security agreements in the forms of Exhibits C or D hereto
(as applicable) and containing a description of all Collateral consisting of Intellectual Property
registered with the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, have been delivered to the Collateral Agent or its nominee or custodian for
recording by the United States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as
applicable, and otherwise as may be reasonably required pursuant to the laws of any other
reasonably necessary jurisdiction, to protect the validity of and to establish a legal, valid and
perfected Security Interest in favor of the Collateral Agent or its nominee or custodian (for its
own benefit and the benefit of the other Secured Parties) in respect of all Collateral consisting
of Patents, Trademarks and Copyrights in which a security interest may be perfected by filing,
recording or registration in the United States Patent and Trademark Office or United States
Copyright Office, 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 Patents, Trademarks and
Copyrights (or registration or application for registration thereof) acquired or developed after
the date hereof).

          Section 3.03 Validity of Security Interest. The Security Interest constitutes:

          (a) a legal and valid Lien (prior and superior in right and interest to any other Person other
than with respect to Permitted Liens) in all the Collateral securing the payment and performance of
the Obligations;

          (b) subject to the filings described in Section 3.02 above, a perfected Lien (prior
and superior in right and interest to any other Person other than with respect to Permitted Liens)
in all Collateral in which a security interest may be perfected by filing, recording or registering
a financing

 - 14 - 

 

statement or analogous document in the United States (or any political subdivision thereof)
and its territories and possessions pursuant to the Uniform Commercial Code or other applicable Law
in such jurisdictions;

          (c) with respect to:

               (i) Blocked Accounts or Deposit Accounts, upon delivery of a Blocked Account Agreement
with respect to a Blocked Account or a DACA with respect to a Deposit Account, a perfected
Lien (prior and superior in right and interest to any other Person other than with respect
to Permitted Liens) in such Blocked Account or Deposit Account, as applicable;

               (ii) Electronic Chattel Paper, upon compliance by the relevant Grantor with Section
4.16 hereof, a perfected Lien (prior and superior in right and interest to any other
Person other than with respect to Permitted Liens) in all Electronic Chattel Paper;

               (iii) Investment Property, a perfected Lien (prior and superior in right and interest
to any other Person other than with respect to Permitted Liens) in all Investment Property
to the extent that perfection can be accomplished by compliance with the terms of Section
9-106 of the UCC; and

               (iv) Letter-of-Credit Rights, upon delivery of a control agreement as provided in
Section 4.16(d) hereof, a perfected Lien (prior and superior in right and interest
to any other Person other than with respect to Permitted Liens) in all Letter-of-Credit
Rights; and

          (d) a perfected Lien (prior and superior in right and interest to any other Person other than
with respect to Permitted Liens) in all Collateral in which a security interest may be perfected
upon the receipt and recording of this Agreement with the United States Patent and Trademark Office
and the United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. §
205.

          Section 3.04 Absence of Other Liens. The Collateral is owned by the Grantors free and
clear of any Lien, except for Liens expressly permitted pursuant to Section 4.10 of the Indenture
(including, without limitation, Liens granted in the ABL Collateral in favor of the ABL Collateral
Agent pursuant to the ABL Loan Documents). The Grantors have not (i) filed or consented to the
filing of (A) any financing statement or analogous document under the Uniform Commercial Code or
any other applicable laws covering any Collateral, (B) any assignment in which any Grantor assigns
any Collateral or any security agreement or similar instrument covering any Collateral with the
United States Patent and Trademark Office or the United States Copyright Office or (C) any
assignment in which any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or similar instrument is
still in effect or (ii) entered into any agreement in which any Grantor grants Control over any
Collateral, except, in each case, with respect to Liens expressly permitted pursuant to Section
4.10 of the Indenture (including, without limitation, Liens granted in the ABL Collateral in favor
of the ABL Collateral Agent pursuant to the ABL Loan Documents).

          Section 3.05 [Reserved]

          Section 3.06 Claims. As of the date hereof, none of the Collateral consists of a
Claim with respect to which any Grantor is a party to any judicial action or arbitration proceeding
having a value in excess of $1,000,000, except as set forth on Schedule V hereto.

 - 15 - 

 

          Section 3.07 Instruments and Chattel Paper. As of the date hereof, no amounts payable
under or in connection with any of the Collateral are evidenced by any Instrument or Chattel Paper
with an individual face value in excess of $500,000 (or, with respect to all such Instruments or
Chattel Paper, an aggregate face value in excess of $1,000,000), other than such Instruments and
Chattel Paper listed in Schedule VI hereto.

          Section 3.08 Securities Accounts and Commodity Accounts. As of the date hereof, no
Grantor has any Securities Accounts or Commodity Accounts other than those listed in Schedule
VII hereto.

          Section 3.09 Electronic Chattel Paper and Transferable Records. As of the date
hereof, no amount under or in connection with any of the Collateral is evidenced by any Electronic
Chattel Paper or any “transferable record” (as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act, as in effect in any relevant jurisdiction) with an individual face
value in excess of $500,000 (or, with respect to all such Electronic Chattel Paper or transferable
records, an aggregate face value in excess of $1,000,000), other than such Electronic Chattel Paper
and transferable records listed in Schedule VIII hereto.

          Section 3.10 Fair Labor Standards Act. All of such Grantor’s Inventory has or will
have been produced in compliance with the applicable requirements of the Fair Labor Standards Act,
as amended from time to time, or any successor statute, and regulations promulgated thereunder.

ARTICLE IV

COVENANTS

          Section 4.01 Change of Name; Location of Collateral; Records; Place of Business.

          (a) Each Grantor agrees to furnish to the Collateral Agent at least fifteen (15) days (or such
shorter period of time as may be agreed to by the Collateral Agent) prior written notice of any
change (i) in its corporate, limited liability company or partnership name, (ii) in the location of
its chief executive office or its principal place of business (including the establishment of any
such new office or facility), (iii) in its organizational structure or (iv) in its Federal Taxpayer
Identification Number or state organizational number. Each Grantor agrees not to effect or permit
any change referred to above in this Section 4.01 unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to
continue at all times following such change to have a valid, legal and perfected Lien (prior and
superior in right and interest to any other Person other than with respect to Permitted Liens) in
all the Collateral. Each Grantor agrees promptly to notify the Collateral Agent if any material
portion of the Collateral owned or held by such Grantor is damaged or destroyed.

          (b) Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate
records with respect to the Collateral owned by it as is consistent with its current practices and
in accordance with such prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to include complete accounting
records indicating all payments and proceeds received with respect to any part of the Collateral,
and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in form and detail
reasonably satisfactory to the Collateral Agent showing the identity, amount and location of any
and all Collateral.

          Section 4.02 Periodic Certification. Each year, at the time of delivery (or filings
with the Commission) of annual financial statements with respect to the preceding fiscal year
pursuant to

 - 16 - 

 

Section 4.19(a)(1) of the Indenture, the Company shall deliver to the Collateral Agent a
certificate executed by a Financial Officer and the chief legal officer of the Company (i) setting
forth the information required pursuant to Section 2 of the Perfection Certificate or confirming
that there has been no change in such information since the date of such certificate or the date of
the most recent certificate delivered pursuant to this Section 4.02 and (ii) certifying
that (A) all Uniform Commercial Code financing statements or other appropriate filings, recordings
or registrations, including all refilings, rerecordings and reregistrations, containing a
description of the Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) above and with
the United States Patent and Trademark Office or the United States Copyright Office to the extent
necessary to protect and perfect the Security Interest for a period of not less than 18 months
after the date of such certificate (except as noted therein with respect to any continuation
statements to be filed within such period) and (B) valid Blocked Account Agreements and/or DACAs
are in effect with respect to all Blocked Accounts and each Deposit Account of any Grantor as to
which the ABL Collateral Agent (or its agent) has Control as of such date, or if ABL Cash
Management Requirements are not in effect, all Deposit Accounts (other than De Minimis Deposit
Accounts). Each certificate delivered pursuant to this Section 4.02 shall identify in the
format of Schedule I, II, III, or IV, as applicable, all
Intellectual Property of any Grantor in existence on the date thereof and not then listed on such
Schedules or previously so identified to the Collateral Agent.

          Section 4.03 Protection of Security Interest. Each Grantor shall, at its own cost and
expense, take any and all actions necessary to defend title to the Collateral against all persons
and to defend the Security Interest of the Collateral Agent in the Collateral against any Lien not
expressly permitted pursuant to Section 4.10 of the Indenture and the priority thereof as a Lien
(prior and superior in right and interest to any other Person other than with respect to Permitted
Liens).

          Section 4.04 Further Assurances. Each Grantor agrees, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further documents, Financing Statements,
agreements and instruments and take all such further actions as the Collateral Agent may from time
to time reasonably request to better assure, preserve, protect and perfect the Security Interest
and the rights and remedies created hereby or the validity or priority of such Security Interest,
including the payment of any fees and taxes required in connection with the execution and delivery
of this Agreement, the granting of the Security Interest and the filing of any Financing Statements
or other documents in connection herewith or therewith. Notwithstanding anything to the contrary,
each Grantor shall not be required to (nor shall the Collateral Agent) mark or otherwise notate
certificates of title relating to motor vehicles to indicate the Lien in favor of the Collateral
Agent except to the extent that the ABL Collateral Agent proceeds to mark or otherwise notate
certificates of title relating to motor vehicles to indicate the Lien in favor of the ABL
Collateral Agent. Without limiting the foregoing, each Grantor agrees, at its own expense, to
execute, acknowledge, deliver and cause to be duly filed all such further documents, Financing
Statements, agreements and instruments and take all such further actions as the Collateral Agent
may from time to time reasonably request to perfect the Collateral Agent’s Security Interest in all
Collateral and the Proceeds therefrom (including causing the Collateral Agent to have Control of
any such Collateral to the extent required under the Indenture or this Agreement and to the extent
perfection in such Collateral can be accomplished by Control). Upon the occurrence and during the
continuance of an Event of Default, if any amount payable by parties other than the Grantors under
or in connection with any of the Collateral shall be or become evidenced by any promissory note or
other instrument, such note or instrument, duly endorsed, shall be immediately pledged and
delivered to the Collateral Agent.

          Without limiting the generality of the foregoing, each Grantor hereby shall, and authorizes
the Collateral Agent, with prompt notice thereof to the Grantors, to supplement this Agreement by
supplementing Schedule I, II, III, or IV, or adding additional
schedules hereto to specifically identify

 - 17 - 

 

any asset or item that may constitute Copyrights, Licenses, Patents or Trademarks or to
correct any inaccuracy of any information contained in such Schedules. Each Grantor agrees that it
will use commercially reasonable efforts to take such action as shall be necessary in order that
all representations and warranties hereunder shall be true and correct with respect to such
Collateral within 30 days after the date it has been notified by the Collateral Agent of the
specific identification of such Collateral.

          Section 4.05 Inspection and Verification. The Collateral Agent and such persons as
the Collateral Agent may reasonably designate shall have the right, at the Grantors’ own cost and
expense, to inspect the Collateral, all records related thereto (and to make extracts and copies
from such records) and the premises upon which any of the Collateral is located, to discuss the
Grantors’ affairs with the officers of the Grantors and their independent accountants and, only
upon the occurrence and during the continuance of a Default, to verify 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. The Collateral Agent shall, upon
the occurrence and during the continuance of a Default, have the absolute right to share any
information it gains from such inspection or verification with any Secured Party.

          Section 4.06 Taxes; Encumbrances. At its option, the Collateral Agent may discharge
past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any
time levied or placed on the Collateral and not permitted pursuant to Section 4.10 of the Indenture
(or after the occurrence and during the continuation of an Event of Default, whether or not
permitted pursuant to Section 4.10 of the Indenture), and may pay for the maintenance and
preservation of the Collateral to the extent any Grantor fails to do so as required by the
Indenture or this Agreement, and each Grantor jointly and severally agrees to reimburse the
Collateral Agent on demand for any payment made or any expense reasonably incurred by the
Collateral Agent pursuant to the foregoing authorization; provided, however, that
nothing in this Section 4.06 shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein
or in the other Note Documents.

          Section 4.07 Assignment of Security Interest. If at any time any Grantor shall take a
security interest in any property of an Account Debtor or any other person to secure payment and
performance of an Account, such Grantor shall promptly assign such security interest to the
Collateral Agent. Unless and until an Event of Default shall have occurred and be continuing and
the Collateral Agent has requested the filing of such assignment, such assignment need not be filed
of public record unless necessary to continue the perfected status of the security interest against
creditors of and transferees from the Account Debtor or other person granting the security
interest.

          Section 4.08 Continuing Obligations of the Grantors. Each Grantor shall remain liable
to observe and perform all the conditions and obligations to be observed and performed by it under
each contract, agreement or instrument relating to the Collateral, all in accordance with the terms
and conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and all liability for
such performance; provided that such indemnity shall not, as to the Collateral Agent or any
of the Secured Parties, be available to the extent that such losses, claims, damages, liabilities
or related expenses are determined by a court of competent jurisdiction by final judgment to have
resulted from the gross negligence or willful misconduct of such party.

          Section 4.09 Use and Disposition of Collateral. None of the Grantors shall make or
permit to be made an abandonment, assignment, pledge, transfer or hypothecation of the Collateral
or

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shall grant any other Lien in respect of the Collateral, except as expressly permitted by
Sections 4.09, 4.10, 10.03, 10.04 or 11.03 of the Indenture, in each case subject to the following
sentence. Unless and until the Collateral Agent shall notify the Grantors that an Event of Default
shall have occurred and be continuing and that during the continuance thereof the Grantors shall
not sell, convey, lease, assign, transfer or otherwise dispose of any Collateral (which notice may
be given by telephone if promptly confirmed in writing), the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of this Agreement, the
Indenture or any other Note Document.

          Section 4.10 Limitation on Modification of Accounts. None of the Grantors will,
without the Collateral Agent’s prior written consent, grant any extension of the time of payment of
any of the Receivables, compromise, compound or settle the same for less than the full amount
thereof, release, wholly or partly, any person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts, compromises or
settlements granted or made in the ordinary course of business and consistent with its current
practices and in accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged.

          Section 4.11 Insurance. The Grantors, at their own expense, shall maintain or cause
to be maintained insurance covering physical loss or damage to its property in accordance with
Section 4.23 of the Indenture. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such
Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of
any Event of Default, of making, settling and adjusting claims in respect of Collateral under
policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other
item of payment for the proceeds of such policies of insurance and for making all determinations
and decisions with respect thereto. In the event that any Grantor at any time or times shall fail
to obtain or maintain any of the policies of insurance required hereby or to pay any premium in
whole or part relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium and take any other actions with
respect thereto as the Collateral Agent deems commercially reasonable. All sums disbursed by the
Collateral Agent in connection with this Section 4.11, including reasonable attorneys’
fees, court costs, expenses and other reasonable charges relating thereto, shall be payable, upon
demand, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby.

          Section 4.12 Legend. To the extent that the Collateral Agent may reasonably request,
in order to perfect the Security Interest or to enable the Collateral Agent to exercise its rights
and remedies hereunder, each Grantor shall legend, in form and manner satisfactory to the
Collateral Agent, its Accounts Receivable and its Books and Records and documents evidencing or
pertaining thereto with an appropriate reference to the fact that such Accounts Receivable have
been assigned to the Collateral Agent for the benefit of the Secured Parties and that the
Collateral Agent has a security interest therein.

          Section 4.13 Covenants Regarding Patent, Trademark and Copyright Collateral. (a)
Each Grantor agrees that it will not, and will use commercially reasonable efforts not to permit
any of its licensees to, do any act, or omit to do any act, whereby any Patent which is material to
the conduct of such Grantor’s business may become invalidated or dedicated to the public, and
agrees that it shall continue to mark any products covered by a Patent with the relevant patent
number as necessary and sufficient to establish and preserve its maximum rights under applicable
patent laws.

          (b) Each Grantor (either itself or through its licensees or its sublicensees) will, for each
Trademark material to the conduct of such Grantor’s business, (i) maintain such Trademark in full
force free from any claim of abandonment or invalidity for non-use other than such claims contested
in

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good faith by such Grantor in appropriate proceedings in the proper forums, (ii) maintain the
quality of products and services offered under such Trademark, (iii) display such Trademark with
notice of Federal or foreign registration to the extent necessary and sufficient to establish and
preserve its rights under applicable Law and (iv) not knowingly use or knowingly permit the use of
such Trademark in violation of any third party rights.

          (c) Each Grantor (either itself or through licensees) 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 rights under
applicable copyright laws.

          (d) Each Grantor shall notify the Collateral Agent promptly if it knows or has reason to know
that any Patent, Trademark or Copyright material to the conduct of its business 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 or the United States Copyright Office or any court)
regarding such Grantor’s ownership of any material Patent, Trademark or Copyright, its right to
register the same, or to keep and maintain the same.

          (e) In no event shall any Grantor, either itself or through any agent, employee, licensee or
designee, file an application for the registration of any Patent, Trademark or Copyright with the
United States Patent and Trademark Office, United States Copyright Office or any office or agency
in any political subdivision of the United States, unless it promptly informs the Collateral Agent,
and, upon request of the Collateral Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Collateral Agent may reasonably request to evidence the
Collateral Agent’s security interest in such Patent, Trademark or Copyright, and each Grantor
hereby appoints the Collateral Agent as its attorney-in-fact to execute and file such writings for
the foregoing purposes to the extent that such Grantor fails to promptly do so, all acts of such
attorney being hereby ratified and confirmed; such power, being coupled with an interest, is
irrevocable.

          (f) Each Grantor will take all necessary steps that are consistent with customary practice in
any proceeding before the United States Patent and Trademark Office, United States Copyright Office
or any office or agency in any political subdivision of the United States, to maintain and pursue
each material application relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each registration of the
Trademarks and Copyrights that is material to the conduct of any Grantor’s business, 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.

          (g) In the event that any Grantor has reason to believe that any Collateral consisting of
Intellectual Property material to the conduct of any Grantor’s business has been or is about to be
infringed, misappropriated or diluted by a third party, such Grantor promptly shall notify the
Collateral Agent and shall, if consistent with good business judgment, 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.

          (h) Upon and during the continuance of an Event of Default, upon the Collateral Agent’s
written request, each Grantor shall use its commercially reasonable efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License or Trademark
License to

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effect the assignment of all of such Grantor’s right, title and interest thereunder to the
Collateral Agent or its designee and such Grantor shall provide immediate written notice to the
Collateral Agent upon failure to obtain any such consent or approval.

          (i) Each Grantor will use commercially reasonable efforts so as not to permit the inclusion of
any provisions that could or might in any way impair or prevent the creation of a security interest
in, or the assignment of, such Grantor’s rights and interests therein in any license, contract or
agreement governing or relating to any Trademarks, Patents or Copyrights or Equity Interests in
joint ventures obtained after the date hereof.

          Section 4.14 Warehouse Receipts. Each Grantor agrees that if any warehouse receipt or
receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such
warehouse receipt or receipt in the nature thereof shall not be “negotiable” (as such term is used
in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under
other relevant Law).

          Section 4.15 Claims. If any Grantor shall at any time hold or acquire a Claim with
respect to which any Grantor is a party to any judicial action or arbitration proceeding having a
value in excess of $1,000,000, such Grantor shall promptly (but, in any event, within thirty (30)
Business Days) notify the Collateral Agent in writing of the details thereof, and update
Schedule V and the Grantors shall take such other actions as the Collateral Agent shall
reasonably request in order to grant to the Collateral Agent, for the ratable benefit of the Credit
Parties, a perfected security interest therein and in the Proceeds thereof.

          Section 4.16 Other Actions. In order to further ensure the attachment, perfection and
priority of, and the ability of the Collateral Agent to enforce, the Collateral Agent’s Security
Interest in the Collateral, each Grantor covenants and agrees, in each case at such Grantor’s own
expense, to take the following actions with respect to the following Collateral:

          (a) No Grantor shall hereafter establish and maintain any Securities Account or Commodity
Account with any Securities Intermediary or Commodity Intermediary (excluding for purposes of this
Section 4.16 money market accounts created by a Grantor in the ordinary course of business
for the purpose of funding temporary investments of cash used in the day-to-day of operations of
such Grantor’s business) unless (i) such Securities Intermediary or Commodity Intermediary shall be
reasonably acceptable to the Collateral Agent, and (ii) such Securities Intermediary or Commodity
Intermediary, as the case may be, and such Grantor shall have duly executed and delivered a control
agreement with respect to such Securities Account or Commodity Account, as the case may be. Each
Grantor shall accept any security entitlements in trust for the benefit of the Collateral Agent and
within two (2) Business Days of actual receipt thereof, deposit any and all security entitlements
(excluding Investment Property in money market accounts created by a Grantor in the ordinary course
of business for the purpose of funding temporary investments of cash used in the day-to-day of
operations of such Grantor’s business) received by it into a Securities Account subject to the
Collateral Agent’s Control. The provisions of this Section 4.16(a) shall not apply to any
financial assets credited to a Securities Account for which the Collateral Agent or its nominee or
custodian is the Securities Intermediary. No Grantor shall grant Control over any Investment
Property that constitutes Collateral to any person other than the ABL Collateral Agent or the
Collateral Agent.

          (b) As between the Collateral Agent and the Grantors, the Grantors shall bear the investment
risk with respect to the Investment Property and Securities, and the risk of loss of, damage to, or
the destruction of, the Investment Property and Securities, whether in the possession of, or
maintained

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as a security entitlement or deposit by, or subject to the Control of, the Collateral Agent, a
Securities Intermediary, a Commodity Intermediary, any Grantor or any other Person.

          (c) If any amount payable under or in connection with any of the Collateral shall become
evidenced by any Electronic Chattel Paper or any transferable record with an individual face value
in excess of $500,000 (or, with respect to all such Electronic Chattel Paper or transferable
records, an aggregate face value in excess of $1,000,000), other than such Electronic Chattel Paper
and transferable records listed in Schedule VIII hereto, upon and during the continuance of
an Event of Default, the Grantor acquiring such Electronic Chattel Paper or transferable record
shall promptly notify the Collateral Agent thereof and shall take such action as the Collateral
Agent may reasonably request to vest in the Collateral Agent Control of such Electronic Chattel
Paper under Section 9-105 of the UCC or control under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as in effect in such jurisdiction, of such transferable record.

          (d) If any Grantor is at any time a beneficiary under a Letter of Credit now or hereafter
issued having a face value in an amount in excess of $500,000 (or with respect to all such Letters
of Credit, having an aggregate face value in an amount in excess of $1,000,000), upon and during
the continuance of an Event of Default, such Grantor shall promptly notify the Collateral Agent
thereof and such Grantor shall, at the request of the Collateral Agent, use commercially reasonable
efforts to enter into an agreement in form and substance reasonably satisfactory to the Collateral
Agent, either (i) arranging for the issuer and any confirmer of such Letter of Credit to consent to
an assignment to the Collateral Agent of the proceeds of any drawing under the Letter of Credit and
to cause the proceeds of any drawing under such Letter of Credit to be paid directly to the
Collateral Agent, or (ii) arranging for the Collateral Agent to become the transferee beneficiary
of such Letter of Credit, with the Collateral Agent agreeing, in each case, that the proceeds of
any drawing under the Letter of Credit are to be paid directly to the Collateral Agent and applied
as provided in the Indenture.

          (e) (i) If and so long as any ABL Credit Agreement is in effect and contains the provisions in
Section 5.14 of the existing ABL Credit Agreement or other analogous provisions with respect to
cash management (“ABL Cash Management Requirements”), each Grantor agrees to enter into and
maintain in effect a Blocked Account Agreement substantially in the form attached as Exhibit M to
the ABL Credit Agreement (or in such other form reasonably acceptable to the Collateral Agent) with
the banks with which such Grantor maintains accounts into which the DDAs (as defined in the ABL
Credit Agreement) are concentrated (collectively, the “Blocked Accounts”) within the time
period prescribed by the ABL Credit Agreement; provided, however, that the obligations of the
Company and each Grantor with respect to such Deposit Accounts at JPMorgan Bank, N.A. and Bank of
America, N.A. at the Issue Date shall be governed by the next sentence. With respect to each
Deposit Account of any Grantor as to which the ABL Collateral Agent (or its agent) has Control as
of the Issue Date, the Grantors shall use commercially reasonable best efforts to enter into a DACA
by December 31, 2009 and if a DACA with respect to any such Deposit Account as to which the ABL
Collateral Agent has Control is not entered into and in effect by December 31, 2009, to close such
Deposit Account. After December 31, 2009, and if and so long as ABL Cash Management Requirements
are in effect, no Grantor shall establish or maintain any Deposit Account as to which the ABL
Collateral Agent has Control unless a DACA with respect to such Deposit Account has been entered
into and is in effect.

          (ii) If ABL Cash Management Requirements are not in effect, (A) each Grantor agrees to enter
and maintain in effect into a Blocked Account Agreement or a DACA with the banks with which such
Grantor maintains any Deposit Account and covering such Deposit Accounts; provided, that,
no Grantor shall be required to execute and deliver a Blocked Account Agreement or a DACA for, or
grant the Collateral Agent control over, any Deposit Account the daily balance of which, when added
to

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the daily balance of each other Deposit Accounts with respect to which a Blocked Account
Agreement or a DACA has not been executed and delivered in accordance with this Section
4.16, is in the aggregate for all such Deposit Accounts less than the De Minimis Deposit Amount
(each such Deposit Account, a “De Minimis Deposit Account”), (B) each Grantor shall further
execute and deliver such other agreements and documents as the Collateral Agent may reasonably
require to grant the Collateral Agent Control over all Deposit Accounts (other than De Minimis
Deposit Accounts) and (C) no Grantor shall establish any Deposit Account, unless the applicable
Grantor has complied in full with the provisions of this Section 4.16(e)(ii) with respect
to such Deposit Account (except to the extent such Deposit Account is a De Minimis Deposit
Account). “De Minimis Deposit Amount” means an amount equal to the highest five (5)
Business Day moving average during the last full fiscal quarter during which ABL Cash Management
Requirements were in effect of the aggregate amount held at the end of each Business Day in Deposit
Accounts of the Company and the other Grantors that were not Blocked Accounts.

          Section 4.17 Joinder of Additional Grantors. Upon the formation or acquisition of any
new direct or indirect Subsidiary of the Company that is required to be a Guarantor pursuant to
Section 4.17 of the Indenture, then the Grantors shall, at the Grantors’ expense, cause such
Subsidiary to execute and deliver to the Collateral Agent an Accession Agreement and to comply with
the requirements of Section 4.17 of the Indenture, within the time periods specified therein, and,
upon such execution and delivery, such Subsidiary shall constitute a “Grantor” for all purposes
hereunder with the same force and effect as if originally named as a Grantor herein. The execution
and delivery of such Accession Agreement shall not require the consent of any Grantor hereunder.
The rights and obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Agreement.

ARTICLE V

COLLECTIONS

          Section 5.01 Accounts. (a) If and so long as any ABL Credit Agreement is in effect
and contains ABL Cash Management Requirements, each Grantor agrees as follows.

               (i) From and after the Issue Date, each Grantor agrees to deposit all Daily Receipts
into the DDAs (as defined in the ABL Credit Agreement) on a daily basis.

               (ii) From and after the Issue Date, the Grantors agree to transfer, or cause to be
transferred, all Cash Receipts (as defined in the ABL Credit Agreement) on deposit in any
DDA (except, such amounts necessary (i) for the payment of routine bank service fees and
(ii) to reconcile deposit balances) to a Blocked Account. Such transfers shall occur no
less than three (3) times a week.

               (iii) Except upon the occurrence and during the continuance of an Event of Default, the
Company may instruct each bank or other financial institution at which the Grantors maintain
a Blocked Account (each, a “Blocked Account Bank”) as to the application of any Cash
Receipts contained in any Blocked Account if and so long as such application and use does
not violate, or result in a Default under, the Indenture and the other Note Documents.

               (iv) Upon the occurrence and during the continuance of an Event of Default, the Company
may continue to instruct each Blocked Account Bank as to the application of any Cash
Receipts until and unless the Collateral Agent or its agent (including the ABL Collateral
Agent), nominee or custodian shall notify the Company and the Grantors with respect to each
Blocked Account that such account shall be closed and/or under the exclusive dominion and
control of the Collateral Agent or its agent (including the ABL Collateral Agent), nominee
or

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custodian with funds therein held subject to the rights of the Collateral Agent
hereunder and under the other Note Documents. During the continuance of an Event of Default
and upon and after such notice, no Grantor shall have any right or power to withdraw any
funds from any Blocked Account without the prior written consent of the Collateral Agent or
its agent (including the ABL Collateral Agent), nominee or custodian.

               (v) All taxes payable on the income of the cash and cash equivalents upon any
disposition thereof shall be paid by Grantors and the Collateral Agent shall have no
obligations with respect thereto.

               (vi) In the event that a Grantor directly receives any remittances on Receivables,
notwithstanding the arrangements for payment directly into the Blocked Accounts pursuant to
Section 5.02, such remittances shall be held for the benefit of the Collateral Agent
and the Secured Parties and shall be segregated from other funds of such Grantor, subject to
the Security Interest granted hereby, and such Grantor shall cause such remittances and
payments to be deposited into a Blocked Account as soon as practicable after such Grantor’s
receipt thereof. After the occurrence of an Event of Default, upon the notice by the
Collateral Agent or its agent (including the ABL Collateral Agent), nominee or custodian to
the Grantors, such remittances and payments shall be deposited into the Agent’s Account as
soon as practicable after such Grantor’s receipt thereof.

               (vii) All payments by any Grantor into any Blocked Account or the Agent’s Account
pursuant to this Section 5.01 or Section 5.02, whether in the form of cash,
checks, notes, drafts, bills of exchange, money orders or otherwise, shall be deposited in
the relevant Blocked Account or Agent’s Account in precisely the form in which received (but
with any endorsements of such Grantor necessary for deposit or collection), and until they
are so deposited such payments shall be held in trust by such Grantor for the benefit of the
Collateral Agent subject to the Security Interest granted hereby.

          (b) If ABL Cash Management Requirements are not in effect, each Grantor shall deposit all
Daily Receipts on a daily basis, and shall instruct all Account Debtors to make payment, into a
Deposit Account subject to a Blocked Account Agreement or a DACA (or if and to the extent permitted
by Section 4.16(e)(ii) of this Agreement into a De Minimis Deposit Account), and all
amounts received by the Grantors in respect of any Account, in addition to all other cash received
from any other source, shall upon receipt of such amount or cash be deposited on a daily basis in a
Deposit Account subject to a Blocked Account Agreement or a DACA (or if and to the extent permitted
by Section 4.16(e)(ii) of this Agreement into a De Minimis Deposit Account).

          Section 5.02 Collections. (a) If and so long as any ABL Credit Agreement is in
effect and contains ABL Cash Management Requirements, each Grantor agrees as follows.

               (i) Each Grantor shall at all times operate its cash management system in accordance
with the provisions of Section 5.14 of the ABL Credit Agreement or other analogous
provisions with respect to cash management in any other ABL Credit Agreement, including,
without limitation, upon the occurrence and during the continuance of an Event of Default
and upon notice from the Collateral Agent, causing the transfer on each Business Day of all
Cash Receipts into the Agent’s Account.

               (ii) Without the prior written consent of the Collateral Agent, no Grantor shall modify
or amend the instructions pursuant to any Blocked Account Agreement or notification required
by Section 5.14 of the ABL Credit Agreement or other analogous provisions

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with respect to cash management in any other ABL Credit Agreement. Each Grantor agrees
that with respect to Account Debtors and every other Person required to receive a
notification identified in the preceding sentence, it shall have instructed each such
Account Debtor or other Person to make all such payments to a Blocked Account established by
it (or upon the occurrence and during the continuance of an Event of Default and upon the
notice by the Collateral Agent or its agent (including the ABL Collateral Agent), nominee or
custodian, the Agent’s Account). Each Grantor shall use commercially reasonable efforts to
cause each Account Debtor and every other Person identified in the preceding sentence to
make all payments with respect to the Receivables or other Collateral directly to such
Blocked Account (or upon the occurrence and during the continuance of an Event of Default
and upon the notice by the Collateral Agent or its agent (including the ABL Collateral
Agent), nominee or custodian, the Agent’s Account).

               (iii) Without the prior written consent of the Collateral Agent, no Grantor shall
change the general instructions given to Account Debtors in respect of payment on
Receivables to be deposited in a Blocked Account or the Agent’s Account. Each Grantor
shall, and the Collateral Agent hereby authorizes each Grantor to, enforce and collect all
amounts owing on the Inventory and Receivables, for the benefit and on behalf of the
Collateral Agent and the other Secured Parties; provided, however, that such
privilege may at the option of the Collateral Agent be terminated upon the occurrence and
during the continuance of any Event of Default upon notice to the Grantors.

          (b) If ABL Cash Management Requirements are not in effect, each Grantor shall at all times
comply with the provisions of the Blocked Account Agreements or DACAs entered into, or required to
be entered into, pursuant to Section 4.16(e)(ii), which will include, without limitation,
the requirement that the Grantors shall, upon the occurrence and during the continuance of an Event
of Default and upon notice from the Collateral Agent, cause the transfer on each Business Day of
all available cash balances and cash receipts into the Agent’s Account. So long as no Event of
Default has occurred and is continuing, the Grantors may direct the manner of disposition of funds
in the Deposit Accounts subject to Blocked Account Agreements or DACAs and compliance with the
Indenture, this Security Agreement and the other Note Documents. Without the prior written consent
of the Collateral Agent, no Grantor shall modify or amend the instructions pursuant to any Blocked
Account Agreement.

          Section 5.03 Power of Attorney. Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral
Agent) as such Grantor’s true and lawful agent and attorney-in-fact, and in such capacity the
Collateral Agent shall have the right, with power of substitution for each Grantor and in each
Grantor’s name or otherwise, for the use and benefit of the Collateral Agent and the Secured
Parties, (i) at any time, whether or not a Default or Event of Default has occurred, to take
actions required to be taken by the Grantors under Section 2.01 of this Agreement, (ii)
upon the occurrence and during the continuance of an Event of Default, (A) to take actions required
to be taken by the Grantors under Section 5.01 of this Agreement, (B) to receive, endorse,
assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other
evidences of payment relating to the Collateral or any part thereof; (C) to demand, collect,
receive payment of, give receipt for and give discharges and releases of all or any of the
Collateral; (D) to sign the name of any Grantor on any invoices, schedules of Collateral, freight
or express receipts, or bills of lading storage receipts, warehouse receipts or other documents of
title relating to any of the Collateral; (E) to sign the name of any Grantor on any notice to the
Grantor’s Account Debtors (including licensees under any license agreements); (F) to sign the name
of any Grantor on any proof of claim in bankruptcy against Account Debtors (including licensees
under any license agreements); (G) to sign change of address forms to change the address to which
any Grantor’s mail is to be sent to such address as the Collateral Agent shall designate; (H) to
receive and open any Grantor’s mail, remove any Proceeds of Collateral therefrom and turn over the
balance of such mail either to such Grantor or to any trustee in

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bankruptcy or receiver of such Grantor, or other legal representative of such Grantor whom the
Collateral Agent determines to be the appropriate person to whom to so turn over such mail; (I) to
send verifications of Receivables to any Account Debtor; (J) to commence and prosecute any and all
suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect
or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any
Collateral; (K) to settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (L) to repair, manufacture, assemble, complete, package,
deliver, alter or supply goods, if any, necessary to fulfill in whole or in part the purchase order
of any customer of the Grantor; (M) to use, license or transfer any or all General Intangibles of
any Grantor; and (N) to use, sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to
carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent
were the absolute owner of the Collateral for all purposes and (iii) upon the occurrence of an
Event of Default, to notify or to require any Grantor to notify Account Debtors to make payment
directly to the Collateral Agent (or its nominee or custodian); provided, however,
that nothing herein contained shall be construed as requiring or obligating the Collateral Agent or
any Secured Party to make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by the Collateral Agent or any Secured Party, or to present or file any claim
or notice, or to take any action with respect to the Collateral or any part thereof or the moneys
due or to become due in respect thereof or any property covered thereby, and no action taken or
omitted to be taken by the Collateral Agent or any Secured Party with respect to the Collateral or
any part thereof shall give rise to any defense, counterclaim or offset in favor of any Grantor or
to any claim or action against the Collateral Agent or any Secured Party other than arising out of
the gross negligence or willful misconduct of the Collateral Agent or any such Secured Party. It
is understood and agreed that the appointment of the Collateral Agent as the agent and
attorney-in-fact of the Grantors for the purposes set forth above is coupled with an interest and
is irrevocable. The provisions of this Section shall in no event relieve any Grantor of any of its
obligations hereunder or under any other Note Document with respect to the Collateral or any part
thereof or impose any obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any way limit the
exercise by the Collateral Agent or any Secured Party of any other or further right which it may
have on the date of this Agreement or hereafter, whether hereunder, under any other Note Document,
by law or otherwise.

ARTICLE VI

REMEDIES

          Section 6.01 Remedies upon Default. Upon the occurrence and during the continuance of
an Event of Default, it is agreed that the Collateral Agent shall have in any jurisdiction in which
enforcement hereof is sought, in addition to all other rights and remedies, the rights and remedies
of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights
are exercised) or other applicable Law. The rights and remedies of the Collateral Agent shall
include, without limitation, the right to take any or all of the following actions at the same or
different times:

          (a) With respect to any Collateral consisting of Accounts, General Intangibles (including
Payment Intangibles), Letter-of-Credit Rights, Instruments, Chattel Paper, Documents, and
Investment Property, the Collateral Agent may collect the Collateral with or without the taking of
possession of any of the Collateral.

          (b) With respect to any Collateral consisting of Accounts, the Collateral Agent may: (i)
demand, collect and receive any amounts relating thereto, as the Collateral Agent may determine;
(ii) commence and prosecute any actions in any court for the purposes of collecting any such
Receivables and enforcing any other rights in respect thereof; (iii) defend, settle or compromise
any action brought and, in connection therewith, give such discharges or releases as the Collateral
Agent may reasonably deem

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appropriate; (iv) without limiting the Collateral Agent’s rights set forth in Section
5.03 hereof, receive, open and dispose of mail addressed to any Grantor and endorse checks,
notes, drafts, acceptances, money orders, bills of lading, warehouse receipts or other instruments
or documents evidencing payment, shipment or storage of the goods giving rise to such Receivables
or securing or relating to such Receivables, on behalf of and in the name of such Grantor; and (v)
sell, assign, transfer, make any agreement in respect of, or otherwise deal with or exercise rights
in respect of, any such Receivables or the goods or services which have given rise thereto, as
fully and completely as though the Collateral Agent was the absolute owner thereof for all
purposes.

          (c) With respect to any Collateral consisting of Investment Property, the Collateral Agent
may: (i) exercise all rights of any Grantor with respect thereto, including without limitation, the
right to exercise all voting and corporate rights at any meeting of the shareholders of the issuer
of any Investment Property and to exercise any and all rights of conversion, exchange, subscription
or any other rights, privileges or options pertaining to any Investment Property as if the
Collateral Agent was the absolute owner thereof, including the right to exchange, at its
discretion, any and all of any Investment Property upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof, all without liability; (ii) transfer
such Collateral at any time to itself, or to its nominee, and receive the income thereon and hold
the same as Collateral hereunder or apply it to the Obligations; and (iii) demand, sue for, collect
or make any compromise or settlement it deems desirable. The Grantors recognize that (i) the
Collateral Agent may be unable to effect a public sale of all or a part of the Investment Property
by reason of certain prohibitions contained in the Securities Act of 1933, 15 U.S.C. §77, (as
amended and in effect, the “Securities Act”) or the Securities laws of various states (the
“Blue Sky Laws”), but may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things, to acquire the
Investment Property for their own account, for investment and not with a view to the distribution
or resale thereof, (ii) that private sales so made may be at prices and upon other terms less
favorable to the seller than if the Investment Property were sold at public sales, (iii) that
neither the Collateral Agent nor any other Secured Party has any obligation to delay sale of any of
the Investment Property for the period of time necessary to permit the Investment Property to be
registered for public sale under the Securities Act or the Blue Sky Laws, and (iv) that private
sales made under the foregoing circumstances shall be deemed to have been made in a commercially
reasonable manner. Notwithstanding anything herein to the contrary, no Grantor shall be required
to register, or cause the registration of, any Investment Property under the Securities Act or any
Blue Sky Laws.

          (d) With respect to any Collateral consisting of Inventory, Goods, and Equipment, the
Collateral Agent may conduct one or more going out of business sales, in the Collateral Agent’s own
right or by one or more agents and contractors. Such sale(s) may be conducted upon any premises
owned, leased, or occupied by any Grantor. The Collateral Agent and any such agent or contractor,
in conjunction with any such sale, may augment the Inventory with other goods (all of which other
goods shall remain the sole property of the Collateral Agent or such agent or contractor). Any
amounts realized from the sale of such goods which constitute augmentations to the Inventory (net
of an allocable share of the costs and expenses incurred in their disposition) shall be the sole
property of the Collateral Agent or such agent or contractor and neither any Grantor nor any Person
claiming under or in right of any Grantor shall have any interest therein. Each purchaser at any
such going out of business sale shall hold the property sold absolutely, free from any claim or
right on the part of any Grantor.

          (e) With or without legal process and with or without prior notice or demand for performance,
the Collateral Agent may enter upon, occupy, and use any premises owned or occupied by each
Grantor, and may exclude the Grantors from such premises or portion thereof as may have been so
entered upon, occupied, or used by the Collateral Agent. The Collateral Agent shall not be
required to remove any of the Collateral from any such premises upon the Collateral Agent’s taking
possession

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thereof, and may render any Collateral unusable to the Grantors. In no event shall the
Collateral Agent be liable to any Grantor for use or occupancy by the Collateral Agent of any
premises pursuant to this Section 6.01, nor for any charge (such as wages for the Grantors’
employees and utilities) incurred in connection with the Collateral Agent’s exercise of the
Collateral Agent’s rights and remedies hereunder, other than for direct or actual damages resulting
from the gross negligence, bad faith or willful misconduct of the Collateral Agent as determined by
a final and nonappealable judgment of a court of competent jurisdiction.

          (f) The Collateral Agent may require any Grantor to assemble the Collateral and make it
available to the Collateral Agent at the Grantor’s sole risk and expense at a place or places which
are reasonably convenient to both the Collateral Agent and such Grantor.

          (g) Each Grantor agrees that the Collateral Agent shall have the right, subject to applicable
Law, to sell or otherwise dispose of all or any part of the Collateral, at public or private sale,
for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. Each
purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on
the part of any Grantor.

          (h) Unless the Collateral is perishable or threatens to decline speedily in value, or is of a
type customarily sold on a recognized market (in which event the Collateral Agent shall provide the
Grantors such advance notice as may be practicable under the circumstances), the Collateral Agent
shall give the Grantors 10 days’ prior written notice, by authenticated record, of the time and
place of any proposed sale. Any such notice shall (i) in the case of a public sale, state the time
and place fixed for such sale, (ii) in the case of a private sale, state the day after which such
sale may be consummated, (iii) contain the information specified in Section 9-613 of the UCC, (iv)
be authenticated and (v) be sent to the parties required to be notified pursuant to Section
9-611(c) of the UCC; provided that, if the Collateral Agent fails to comply with this
sentence in any respect, its liability for such failure shall be limited to the liability (if any)
imposed on it as a matter of law under the UCC. Each Grantor agrees that such written notice shall
satisfy all requirements for notice to that Grantor which are imposed under the UCC or other
applicable Law with respect to the exercise of the Collateral Agent’s rights and remedies hereunder
upon default. The Collateral Agent shall not be obligated to make any sale or other disposition of
any Collateral if it shall determine not to do so, regardless of the fact that notice of sale or
other disposition of such Collateral shall have been given. The Collateral Agent may, without
notice or publication, adjourn any public or private sale or cause the same to be adjourned from
time to time by announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so adjourned.

          (i) Any public sale shall be held at such time or times within ordinary business hours and at
such place or places as the Collateral Agent may fix and state in the notice of such sale. At any
sale or other disposition, the Collateral, or portion thereof, to be sold may be sold in one lot as
an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. If any of the Collateral is sold, leased, or otherwise disposed of by the
Collateral Agent on credit, the Obligations shall not be deemed to have been reduced as a result
thereof unless and until payment in full is received thereon by the Collateral Agent. In the event
that the purchaser fails to pay for the Collateral, the Collateral Agent may resell the Collateral
and, subject to the terms of the Intercreditor Agreement, apply the proceeds from such resale in
accordance with the terms of Section 6.02 of this Agreement.

          (j) At any public (or, to the extent permitted by applicable Law, private) sale made pursuant
to this Section 6.01, the Collateral Agent or any other Secured Party may bid for or
purchase, free (to the extent permitted by applicable Law) from any right of redemption, stay,
valuation or appraisal on the part of any Grantor, the Collateral or any part thereof offered for
sale and may make payment on

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account thereof by using any claim then due and payable to the Collateral Agent or such other
Secured Party from any Grantor on account of the Obligations as a credit against the purchase
price, and the Collateral Agent or such other Secured Party may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability to any Grantor
therefor.

          (k) For purposes hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof. The Collateral Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any
portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall
have entered into such an agreement all Events of Default shall have been remedied and the
Obligations paid in full.

          (l) As an alternative to exercising the power of sale herein conferred upon it, the Collateral
Agent may proceed by a suit or suits at law or in equity to foreclose upon the Collateral and to
sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts
having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver.

          (m) To the extent permitted by applicable Law, each Grantor hereby waives all rights of
demand, redemption, stay, valuation and appraisal which such Grantor now has or may at any time in
the future have under any rule of law or statute now existing or hereafter enacted.

          Section 6.02 Application of Proceeds. Subject to the terms of the Intercreditor
Agreement, after the occurrence and during the continuance of an Event of Default, the Collateral
Agent shall apply the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, in accordance with the provisions of Section 6.10 of the Indenture.
The Collateral Agent shall have absolute discretion as to the time of application of any such
proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by
the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or
purchasers shall not be obligated to see to the application of any part of the purchase money paid
over to the Collateral Agent or such officer or be answerable in any way for the misapplication
thereof.

          Section 6.03 Grant of License to Use Intellectual Property and Other Property. For
the purpose of enabling the Collateral Agent to exercise rights and remedies under this Article,
effective upon the occurrence of an Event of Default and during the continuance thereof, each
Grantor hereby grants to the Collateral Agent (and its agents and contractors) (i) an irrevocable,
non-exclusive license (exercisable without payment of royalty or other compensation to the
Grantors) to use, license or sub-license any of the Collateral consisting of Intellectual Property
now owned or hereafter acquired by such Grantor, 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 computer software and programs used for the compilation or printout
thereof and (ii) the right to utilize (exercisable without any compensation to the Grantors) all
other property and assets of the Grantors (including, without limitation, furniture, fixtures and
equipment) to the extent necessary or appropriate to sell, lease or otherwise dispose of any of the
Collateral and to the extent such right can be granted by the Grantors without the consent of any
third party. The foregoing rights may be exercised, at the option of the Collateral Agent, upon
the occurrence and during the continuation of an Event of Default; provided that any
license, sub-license or other transaction entered into by the Collateral Agent in accordance
herewith shall be binding upon the Grantors notwithstanding any subsequent cure of an Event of
Default.

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ARTICLE VII

MISCELLANEOUS

          Section 7.01 Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in Section 13.02 of the
Indenture.

          Section 7.02 Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest and all obligations of the Grantors hereunder shall be absolute
and unconditional irrespective of (i) any lack of validity or enforceability of the Indenture, any
other Note Document, any agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture, any other Note Document or any other
agreement or instrument, (iii) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, (iv) the existence of any claim,
set-off or other right which any Grantor may have at any time against any other Grantor, the
Collateral Agent , any other Secured Party, or any other Person, whether in connection herewith or
any unrelated transaction; provided that nothing herein shall prevent the assertion of any such
claim by separate suit or compulsory counterclaim or (v) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the
Obligations or this Agreement.

          Section 7.03 Survival of Agreement. All covenants, agreements, representations and
warranties made by any Grantor herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement shall be considered to have been relied
upon by the Holders or other Secured Parties and shall survive the issuance of the Notes,
regardless of any investigation made by any of the Holders or on their behalf, and shall continue
in full force and effect until this Agreement shall terminate.

          Section 7.04 Binding Effect; Several Agreement. This Agreement shall become effective
as to any Grantor when a counterpart hereof executed on behalf of such Grantor shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of
the Collateral Agent, and thereafter shall be binding upon such Grantor and the Collateral Agent
and their respective successors and assigns, and shall inure to the benefit of such Grantor, the
Collateral Agent and the other Secured Parties and their respective successors and assigns, except
that no Grantor shall have the right to assign or transfer its rights or obligations hereunder or
any interest herein or in the Collateral (and any such assignment or transfer shall be void) except
as expressly contemplated by this Agreement or the Indenture. This Agreement shall be construed as
a separate agreement with respect to each Grantor and may be amended, modified, supplemented,
waived or released with respect to any Grantor without the approval of any other Grantor and
without affecting the obligations of any other Grantor hereunder.

          Section 7.05 Successors and Assigns. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral
Agent that are contained in this Agreement shall bind and inure to the benefit of their respective
successors and assigns.

          Section 7.06 Collateral Agent’s Fees and Expenses; Indemnification. (a) Without
limitation of its indemnification obligations under the other Note Documents, each Grantor jointly
and severally agrees to pay upon demand to the Collateral Agent the amount of any and all
reasonable

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expenses, including the reasonable fees, disbursements and other charges of its counsel and of
any experts or agents, which the Collateral Agent may incur in connection with (i) the
administration of this Agreement (including the customary fees and charges of the Collateral
Agent), (ii) the custody or preservation of, or the sale of, collection from or other realization
upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of
the Collateral Agent hereunder or (iv) the failure of any Grantor to perform or observe any of the
provisions hereof.

          (b) Without limitation of its indemnification obligations under the other Note Documents, each
Grantor jointly and severally agrees to indemnify the Collateral Agent, its partners, directors,
officers, employees, agents and advisors (each an “Indemnitee”) against, and hold each of
them harmless from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable fees, disbursements and other charges of counsel, asserted against or
reasonably incurred by any of them arising out of, in any way connected with, or as a result of,
the execution, delivery or performance of this Agreement or any claim, litigation, investigation or
proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee.

          (c) Any such amounts payable as provided hereunder shall be additional Obligations secured
hereby and by the other Collateral Documents. The provisions of this Section 7.06 shall
remain operative and in full force and effect regardless of the termination of this Agreement or
any other Note Document, the consummation of the transactions contemplated hereby, the repayment of
any of the Notes, the invalidity or unenforceability of any term or provision of this Agreement or
any other Note Document, or any investigation made by or on behalf of the Collateral Agent or any
Holder. All amounts due under this Section 7.06 shall be payable on written demand
therefor.

          Section 7.07 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK (EXCEPT FOR THE CONFLICT OF LAWS RULES THEREOF, BUT
INCLUDING GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402).

          Section 7.08 Waivers; Amendment. (a) No failure or delay of the Collateral Agent in
exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Collateral Agent hereunder and of the
Collateral Agent, the Trustee, the Holders and the other Secured Parties under the other Note
Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise
have. No waiver of any provisions of this Agreement or any other Note Document or consent to any
departure by any Grantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice to or demand on any
Grantor in any case shall entitle such Grantor or any other Grantor to any other or further notice
or demand in similar or other circumstances.

          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the
Grantor or Grantors with respect to which such waiver, amendment or modification is to apply,
subject to any consent required in accordance with Article IX of the Indenture.

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          Section 7.09 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER NOTE
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

          Section 7.10 Severability. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a particular provision in
a particular jurisdiction shall not in and of itself affect the validity of such provision in any
other jurisdiction). The parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.

          Section 7.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when taken together shall
constitute but one contract (subject to Section 7.04), and shall become effective as
provided in Section 7.04. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

          Section 7.12 Headings. Article and Section headings used herein are for the purpose
of reference only, are not part of this Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting, this Agreement.

          Section 7.13 Jurisdiction; Consent to Service of Process. (a) Each Grantor hereby
irrevocably and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Agreement or any other Note
Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding
may be heard and determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement or any other Note Document shall
affect any right that, the Collateral Agent, the Trustee, any Holder or any other Secured Party may
otherwise have to bring any action or proceeding relating to this Agreement or any other Note
Document against any of the Grantors or their respective properties in the courts of any
jurisdiction.

          (b) Each Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement or any other
Note Document in any court referred to in paragraph (a) of this Section. Each of the
parties hereto hereby

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irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

          (c) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 7.01. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by law.

          Section 7.14 Termination. (a) This Agreement and the Security Interest shall
terminate when all the Obligations have been indefeasibly paid in full in accordance with the terms
and conditions of the Indenture (other than contingent indemnification obligations with respect to
then unasserted claims which, pursuant to the terms of this Agreement or the other Note Documents
survive the termination of this Agreement or the other Note Documents), at which time the
Collateral Agent shall promptly deliver to the Grantors written authority to terminate, at the
Grantors’ request and expense, all Uniform Commercial Code financing statements and similar
documents which the Grantors shall reasonably request to evidence such termination. Any execution
and delivery of termination statements or documents pursuant to this Section 7.14 shall be
without recourse to or warranty by the Collateral Agent. A Subsidiary that is a Grantor shall
automatically be released from its obligations hereunder and the Security Interest in the
Collateral of such Grantor shall be automatically released in the event that all the capital stock
of such Grantor shall be sold, transferred or otherwise disposed of to a person that is not an
Affiliate of the Company in a transaction permitted by the terms of Section 4.09 of the Indenture.
Upon any sale or other transfer by any Grantor of any Collateral that is permitted under the
Indenture and this Agreement to any Person that is not a Grantor the security interest in such
Collateral shall be automatically released.

          (b) To the extent that a Lien permitted by clauses (ix), (xi), (xii), (xiii), (xvi), (xxiv),
(xxvii) and (xxxii) of the definition of Permitted Liens in the Indenture is granted and the holder
of such Lien requests, the Collateral Agent will execute any documents required to demonstrate to
such holder that the Lien is a Permitted Lien and any requisite priority thereof, and, to the
extent reasonably necessary, take appropriate steps to provide for the release of the Collateral.

          Section 7.15 Headings and Recitals. The recitals at the beginning of this Agreement
and the headings of the sections and subsections hereof are provided for convenience only and shall
not be construed as representations made by any Grantor, and shall not in any way affect the
meaning or construction of any provision of this Agreement.

          Section 7.16 Intercreditor Terms Prevail.  notwithstanding anything herein to the
contrary, the lien and security interest granted to the collateral agent pursuant to this agreement
and the exercise of any right or remedy by the collateral agent hereunder with respect to abl
collateral are, until discharge of all abl obligations, subject to the provisions of the
intercreditor agreement. in the event of any conflict between the terms of the intercreditor
agreement and this agreement, the terms of the intercreditor agreement shall govern and control.
The parties hereto acknowledge that pursuant to the Intercreditor Agreement, the ABL Collateral
Agent has agreed to act as agent and bailee for the Collateral Agent for purposes of perfecting the
Lien of the Collateral Agent in all Control Collateral (as defined in the Intercreditor
Agreement).  Accordingly, delivery or grant of control of such Collateral to the ABL Collateral
Agent shall constitute effective delivery to the Collateral Agent for purposes of this
Agreement.

          Section 7.17 Limitation on Duties of Collateral Agent. Beyond the exercise of
reasonable care in the custody and preservation thereof, the Collateral Agent will not have any
duty as to

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any Collateral in its possession or control or in the possession or control of any sub-agent
or bailee or any income therefrom or as to the preservation of rights against prior parties or any
other rights pertaining thereto. The Collateral Agent will be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession or control if such
Collateral is accorded treatment substantially equal to that which it accords its own property, and
will not be liable or responsible for any loss or damage to any Collateral, or for any diminution
in the value thereof, by reason of any act or omission of any sub-agent or bailee selected by the
Collateral Agent in good faith or by reason of any act or omission such sub-agent or bailee
selected by the Collateral Agent pursuant to instructions from the Collateral Agent, except to the
extent that such liability arises from the Collateral Agent’s gross negligence, bad faith or
willful misconduct. The Collateral Agent shall not be responsible for the existence, genuineness
or value of any of the Collateral or for the validity, perfection, priority or enforceability of
the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action
or omission to act on its part hereunder, except to the extent such action or omission constitutes
gross negligence, bad faith or willful misconduct on the part of the Collateral Agent, for the
validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the
validity of the title of the Company to the Collateral, for insuring the Collateral or for the
payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the
maintenance of the Collateral.

 - 34 - 

 

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

	 	 	 	 	 	 	 
	 	 	THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher McGarry	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Christopher McGarry	 	 
	 

	 	Title:
	 	Vice President and Assistant Secretary
	 	 
	 
	 	 	 	 	 	 
	 	 	ONPOINT, INC. (F/K/A HAMILTON PROPERTY I, INC.)

NORTH JERSEY PROPERTIES, INC. VI

AAL REALTY CORP.

ADBRETT CORP.

BERGEN STREET PATHMARK, INC.

BRIDGE STUART INC.

EAST BRUNSWICK STUART LLC

LANCASTER PIKE STUART, LLC

MACDADE BOULEVARD STUART, LLC

PLAINBRIDGE LLC

SUPERMARKETS OIL COMPANY, INC.

UPPER DARBY STUART, LLC

BEST CELLARS, INC.

BEST CELLARS MASSACHUSETTS, INC.

BEST CELLARS VA INC.

GRAPE FINDS LICENSING CORP.

GRAPE FINDS AT DUPONT, INC.

BEST CELLARS DC INC.

BEST CELLARS LICENSING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher McGarry	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Christopher McGarry	 	 
	 

	 	Title:
	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	COMPASS FOODS, INC.

FOOD BASICS, INC.

HOPELAWN PROPERTY I, INC.

KOHL’S FOOD STORES, INC.

THE SOUTH DAKOTA GREAT ATLANTIC & PACIFIC TEA 

     COMPANY, INC.

KWIK SAVE INC.

MONTVALE HOLDINGS, INC.

SUPER FRESH FOOD MARKETS, INC.

SUPER FRESH FOOD MARKETS OF MARYLAND, INC.

SUPER FRESH/SAV-A-CENTER, INC.	 	 

Signature Page to Security Agreement

 

 

	 	 	 	 	 	 	 
	 	 	SUPER MARKET SERVICE CORP.

SUPER PLUS FOOD WAREHOUSE, INC.

SUPERMARKET DISTRIBUTION SERVICES, INC.

2008 BROADWAY, INC.

BEV, LTD.

FARMER JACK’S OF OHIO, INC.

SHOPWELL, INC. (DBA FOOD EMPORIUM)

CLAY-PARK REALTY CO., INC.

AMSTERDAM TRUCKING CORPORATION (F/K/A DAITCH CRYSTAL DAIRIES, INC.) 

DELAWARE COUNTY DAIRIES, INC.

GRAMATAN FOODTOWN CORP.

SHOPWELL, INC. (ORG IN CONN)

SHOPWELL, INC. (ORG IN MASS)

SHOPWELL, INC. (NEW JERSEY)

THE FOOD EMPORIUM, INC. (CONN)

THE FOOD EMPORIUM, INC. (DELAWARE)

THE FOOD EMPORIUM, INC. (NJ)

TRADEWELL FOODS OF CONN., INC.

APW SUPERMARKET CORPORATION

APW SUPERMARKETS, INC.

WALDBAUM, INC. (DBA WALDBAUM, INC. AND FOOD MART)

LBRO REALTY, INC.

MCLEAN AVENUE PLAZA CORP.

SPRING LANE PRODUCE CORP.

THE MEADOWS PLAZA DEVELOPMENT CORP.

GREENLAWN LAND DEVELOPMENT CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher McGarry
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Christopher McGarry	 	 
	 

	 	Title:
	 	Vice President and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	S E G STORES, INC.

THE OLD WINE EMPORIUM OF WESTPORT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher McGarry	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Christopher McGarry	 	 
	 

	 	Title:
	 	Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	PATHMARK STORES, INC.	 	 
	 
	 

	 	By:
	 	/s/ Christopher McGarry	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Christopher McGarry	 	 
	 

	 	Title:
	 	Senior Vice President and Assistant Secretary	 	 

Signature Page to Security Agreement

 

 

	 	 	 	 	 	 	 
	 	 	BORMAN’S, INC. (DBA FARMER JACK)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher McGarry
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Christopher McGarry	 	 
	 

	 	Title:
	 	Vice President and Assistant Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	MILIK SERVICE COMPANY, LLC	 	 
	 
	 	 	 	 	 	 
	 	 	By Pathmark Stores, Inc., its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher McGarry	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Christopher McGarry	 	 
	 

	 	Title:
	 	Senior Vice President and Assistant Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	LO-LO DISCOUNT STORES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William Moss	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	William Moss	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 

Signature Page to Security Agreement

 

 

	 	 	 	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY,

     as Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael G. Oller, Jr.
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael G. Oller, Jr.	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 

Signature Page to Security Agreement

 

 

Schedule I Copyrights

Copyrights

I-1

 

Schedule II Licenses

Licenses

II-1

 

Schedule III Patents

Patents

III-1

 

Schedule IV Trademarks

Trademarks

IV-1

 

Schedule V Claims

Claims

V-1

 

Schedule VI Instruments and Chattel Paper

Instruments and Chattel Paper

VI-1

 

Schedule VII Securities Accounts and Commodity Accounts

Securities Accounts and Commodity Accounts

VII-1

 

Schedule VIII Electronic Chattel Paper and Transferable Records

Electronic Chattel Paper and Transferable Records

VIII-1

 

EXHIBIT A to Security Agreement

Form of Accession Agreement

          ACCESSION AGREEMENT dated as of [Date] (as amended, modified or supplemented from time
to time, this “Agreement”) among [New Grantor Name], [New Grantor Description] ( the
“New Grantor”), and Wilmington Trust Company, as collateral agent (together with any
successor or successors in such capacity, the “Collateral Agent”) for the benefit of
Wilmington Trust Company, as trustee (together with any successor or successors in such
capacity, the “Trustee”) and the Holders (as defined in the Security Agreement).

          Reference is made to the 113/8% Senior Secured Notes due 2015 of The Great Atlantic & Pacific
Tea Company, Inc., a Maryland corporation (the “Company”) (as amended, restated,
supplemented or modified from time to time, the “Notes”), in the original aggregate
principal amount of $260,000,000 issued pursuant to the Indenture, dated as of August 4, 2009 (as
amended, restated, amended and restated, modified or supplemented from time to time and including
any agreement extending the maturity of, refinancing or otherwise amending, amending and restating
or otherwise modifying or restructuring all or any portion of the obligations of the Company under
the Notes or such agreement or any successor agreement, the “Indenture”) among the Company,
Guarantors, the Collateral Agent and the Trustee. Each Grantor has, pursuant to the Indenture,
unconditionally guaranteed the Obligations (as defined in the Security Agreement).

          As a condition to the issuance of the Notes under the Indenture, the Company and certain
Subsidiaries of the Company (each such Subsidiary individually a “Grantor” and collectively
with the Company, the “Grantors”) have executed and delivered a Security Agreement, dated
as of August 4, 2009 (as amended, supplemented or otherwise modified from time to time, the
“Security Agreement”), among the Company, the other Grantors that are parties thereto and
the Collateral Agent. Capitalized terms used but not defined herein have the meanings assigned in,
or by reference in, the Security Agreement.

          The New Grantor, was [formed] [acquired] by the [Company] [Relevant Grantor] and is a
Subsidiary of the [Company] [Relevant Grantor]. [Describe formation or acquisition transaction, as
applicable.]

          Section 4.17 of the Security Agreement requires that upon formation or acquisition of
any new direct or indirect Subsidiary of the Company that is required to be a Guarantor pursuant to
Section 4.17 of the Indenture, the Grantors shall, at the Grantors’ expense, cause such
Subsidiary to execute and deliver to the Collateral Agent an Accession Agreement and to comply with
the requirements of Section 4.17 of the Indenture, within the time periods specified
therein, and, upon such execution and delivery, such Subsidiary shall constitute a “Grantor” for
all purposes thereunder with the same force and effect as if originally named as a Grantor therein.

          The New Grantor has agreed to execute and deliver this Agreement in order to evidence its
agreement to become a “Grantor” under the Security Agreement. Accordingly, the parties hereto
agree as follows:

          Section 1. Security Agreement. In accordance with Section 4.17 of the
Security Agreement, the New Grantor hereby (i) agrees that, by execution and delivery of a
counterpart signature page to the Security Agreement in the form attached hereto as Exhibit
A, the New Grantor shall become a “Grantor” under the Security Agreement with the same force
and effect as if originally named therein as a Grantor, (ii) acknowledges receipt of a copy of and
agrees to be obligated and bound as a “Grantor” by all

Form of Accession Agreement

A-1

 

of the terms and provisions of the Security Agreement, (iii) grants to the Collateral Agent
for the benefit of the Secured Parties a continuing security interest in all of its right, title
and interest in, to and under the Collateral, in each case to secure the full and punctual payment
of the Obligations in accordance with the terms thereof and to secure the performance of all of the
obligations of each Grantor under the Indenture and the other Note Documents, (iv) represents and
warrants that each of Schedules I, II, III, IV, V,
VI, VII, and VIII to the Security Agreement, as amended, supplemented and
modified as set forth on Schedules I, II, III, IV,
V, VI, VII, and VIII hereto, is complete and accurate with respect
to the New Grantor as of the date hereof after giving effect to the New Grantor’s accession to the
Security Agreement as an additional Grantor thereunder and (v) acknowledges and agrees that, from
and after the date hereof, each reference in the Security Agreement to a “Grantor” or the
“Grantors” shall be deemed to include the New Grantor.

          Section 2. Representations and Warranties. The New Grantor hereby represents and
warrants that:

          (a) This Agreement has been duly authorized, executed and delivered by the New Grantor, and
each of this Agreement and the Security Agreement, as acceded to hereby by the New Grantor,
constitutes a valid and binding agreement of the New Grantor, enforceable against the New Grantor
in accordance with its terms, except in each case as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforceability of
creditors’ rights generally and by equitable principles of general applicability (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

          (b) Attached hereto as Exhibit B is a correct and complete Perfection Certificate
relating to the New Grantor and its Collateral.

          Section 3. Effectiveness. This Agreement and the accession of the New Grantor to the
Security Agreement as provided herein shall become effective with respect to the New Grantor when
the Collateral Agent shall have received (i) a counterpart of this Agreement duly executed by the
New Grantor and (ii) a duly executed counterpart signature page to the Security Agreement as
contemplated hereby.

          Section 4. Integration; Confirmation. On and after the date hereof, the Security
Agreement and the Schedules thereto shall be supplemented as expressly set forth herein; all other
terms and provisions of the Security Agreement and the Schedules thereto shall continue in full
force and effect and unchanged and are hereby confirmed in all respects.

          Section 5. Expenses. The New Grantor agrees to pay (i) all out-of-pocket expenses of
the Collateral Agent, including reasonable fees and disbursements of special and local counsel for
the Collateral Agent, in connection with the preparation, execution and delivery of this Agreement
and any document or agreement contemplated hereby and (ii) all taxes which the Collateral Agent or
any Secured Party may be required to pay by reason of the security interests granted in the
Collateral (including any applicable transfer taxes).

Form of Accession Agreement

A-2

 

          Section 6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK).

          Section 7. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement may be transmitted and/or signed by facsimile and if
so transmitted or signed, shall, subject to requirements of law, have the same force and effect as
a manually signed original and shall be binding on the New Grantor, the Collateral Agent and the
other Secured Parties. The Administrative Agent may also require that this Agreement be confirmed
by a manually signed original hereof; provided, however, that the failure to
request or deliver the same shall not limit the effectiveness of any facsimile document or
signature.

[Signature Pages Follow]

Form of Accession Agreement

A-3

 

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

	 	 	 	 	 
	 	[NEW GRANTOR NAME]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WILMINGTON TRUST COMPANY,

     as Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Signature Page to Accession Agreement

 

 

EXHIBIT A

Counterpart to Security Agreement

          The undersigned hereby executes this counterpart to the Security Agreement dated as of
                    , 20___ by the Grantors party thereto from time to time in favor of Wilmington Trust
Company, as Collateral Agent, and, as of the date hereof, assumes all of the rights and obligations
of a “Grantor” thereunder.

Date:                                        

	 	 	 	 	 
	 	[NEW LOAN PARTY NAME]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

[New Grantor Notice Address]

Exhibit A to Accession Agreement

 

 

EXHIBIT B

Perfection Certificate

Exhibit B to Accession Agreement

 

 

Schedule I to the Security Agreement

Schedule I

 

 

Schedule II to the Security Agreement

Schedule II

 

 

Schedule III to the Security Agreement

Schedule III

 

 

Schedule IV to the Security Agreement

Schedule IV

 

 

Schedule V to the Security Agreement

Schedule V

 

 

Schedule VI to the Security Agreement

Schedule VI

 

 

Schedule VII to the Security Agreement

Schedule VII

 

 

Schedule VIII to the Security Agreement

Schedule VIII

 

 

EXHIBIT B to Security Agreement

PERFECTION CERTIFICATE

          Reference is made to (i) the Security Agreement, dated as of August 4, 2009 (as amended,
supplemented or otherwise modified from time to time, the “Security Agreement”), among The
Great Atlantic & Pacific Tea Company, Inc. (the “Company” and a “Grantor”), the
Subsidiaries of the Company that are parties thereto (each a “Grantor” and collectively
with the Company, the “Grantors”) and Wilmington Trust Company, as collateral agent
(together with any successor or successors in such capacity, the “Collateral Agent”) for
the benefit of the Trustee and the Holders, and (ii) the Pledge Agreement, dated as of August 4,
2009 (as amended, supplemented or otherwise modified from time to time, the “Pledge
Agreement”), among the Company, the Subsidiaries of the Company that are parties thereto and
the Collateral Agent. Capitalized terms used but not defined herein have the meanings assigned in,
or by reference in, the Security Agreement or the Pledge Agreement, as applicable.

          The undersigned hereby certify to the Collateral Agent and each other Secured Party that, on
the Issue Date:

          1. Names.

          (a) The exact corporate name of each Grantor, as such name appears in its respective
certificate of incorporation or any other organizational document, is set forth on Schedule
1(a).

          (b) Set forth on Schedule 1(b) is each other corporate name each Grantor has had in
the past five years, together with the date of the relevant change.

          (c) Except as set forth in Schedule 1(c) hereto, no Grantor has changed its identity
or corporate structure in any way within the past five years. Changes in identity or corporate
structure would include mergers, consolidations and acquisitions, as well as any change in the
form, nature or jurisdiction of corporate organization. If any such change has occurred, include in
Schedule 1(c) the information required by Sections 1 and 2 of this certificate as to each
acquiree or constituent party to a merger or consolidation.

          (d) Set forth in Schedule 1(d) hereto is the state of formation of each Grantor, the
organizational identification number, if any, of each Grantor that is a registered organization and
the Federal Taxpayer Identification Number of each Grantor. Each Grantor is (i) the type of entity
disclosed next to its name in Schedule 1(d) and (ii) a registered organization except to
the extent disclosed in Schedule 1(d).

          2. Current Locations.

          (a) The chief executive office of each Grantor is located at the address set forth in
Schedule 2(a) attached hereto.

          (b) Set forth in Schedule 2(b) attached hereto are all locations where each Grantor
maintains any books or records relating to any Accounts Receivable (with each location at which
chattel paper, if any, is kept being indicated by an *)

          (c) Set forth in Schedule 2(c) are all the locations where each Grantor maintains any
Equipment or other physical Collateral not identified above.

 

 

          (d) Set forth in Schedule 2(d) opposite the name of each Grantor are all the places of
business of such Grantor not identified in paragraphs 2(a), (b) or (c)
above.

          (e) Set forth in Schedule 2(e) opposite the name of each Grantor are the names and
addresses of all Persons other than such Grantor that have possession as a bailee, consignee or
warehouseman of any of the Collateral of such Grantor.

          (f) Set forth on Schedule 2(f) is a list of each deposit account, brokerage account or
securities investment account maintained by any Grantor, including the name and address of the
institution at which the account is located, the type of account, and the account number. Also set
forth on Schedule 2(f) is a true and correct list of all securities intermediaries with
respect to any such securities accounts, including the name and address of any such securities
intermediary.

          (g) Set forth on Schedule 2(g) is a list of all real property held by each Grantor,
whether owned or leased, and the name of the Grantor that owns or leases said property.

          (h) Set forth on Schedule 2(h) is a list of all locations currently used by any
Grantor as distribution centers or warehouses, to the extent not specifically identified as such in
paragraph 2(g) above, in which Collateral of any such Grantor is located. For each such
location that is leased by any Grantor, set forth below is the name and address of the landlord of
such location. For each such location that is a warehouse, set forth below is the name and address
of the operator of such warehouse.

          3. Unusual Transaction. Except for those purchases, acquisitions, and other
transactions as set forth in Schedule 3 attached hereto or otherwise disclosed in Section
1, all Accounts Receivable have been originated by the Grantors and all Inventory has been acquired
by the Grantors from a Person in the ordinary course of business.

          4. File Search Reports. File search reports have been obtained from each
central-filing Uniform Commercial Code filing office identified with respect to such Grantor in
Section 1(d) hereof, and such search reports reflect no liens against any of the Collateral other
than those permitted under the Indenture and Liens that will be terminated on the Issue Date.

          5. UCC Filings. Financing statements on Form UCC-1 in substantially the form of
Schedule 5 hereto have been prepared for filing in the Uniform Commercial Code filing
office in each jurisdiction identified with respect to such Grantor in Section 1(d) hereof (for
each Grantor that is a registered organization) and in each jurisdiction identified with respect to
such Grantor in Section 2 hereof hereof (for each Grantor that is not a registered organization).

          6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
forth, with respect to the filings described in Schedule 5 above, each filing and the
filing office in which such filing is to be made.

          7. Stock Ownership and other Equity Interests. Attached hereto as Schedule 7
is a true and correct list of all the issued and outstanding stock, partnership interests, limited
liability company membership interests or other equity interest (the “Equity Interests”) held by,
directly or indirectly, any Grantor and the record and beneficial owners of such Equity Interests.
Also set forth on Schedule 7 is each Equity Interest held by, directly or indirectly, any
Grantor that represents 50% or less of the Equity Interests of the Person in which such investment
was made. Attached hereto as Schedule 7A is an organizational chart for the Grantors.

 

 

          8. Debt Instruments. Attached hereto as Schedule 8 is a true and correct list
of all promissory notes and other evidence of indebtedness with a face amount of $500,000 or more
held by any Grantor, including all inter-company notes by any Grantor in favor of any other Grantor
or any other Affiliate of such Grantor.

          9. Intellectual Property.

          (a) Attached hereto as Schedule 9(a) is a list of each Grantor’s copyrights (including
copyrights of software) which are registered with the United States Copyright Office. (Please
include the name of the applicable Grantor, the name of the copyright, registration number, and
date of registration.) Also attached hereto as Schedule 9(a) is a list of each Grantor’s
applications for copyrights (including for copyrights of software) which are pending with the
United States Copyright Office. (Please include the name of the applicable Grantor, the name of
the copyright for which an application has been filed, application number, and date of
application.) Also attached hereto as Schedule 9(a) is a list of copyrights licensed by
any Grantor. (Please include the name of the applicable Grantor, the name of the copyright
licensed, the name of the licensor or licensee, and the date of the agreement reflecting such
license arrangement.)

          (b) Attached hereto as Schedule 9(b) is a list of each Grantor’s patents which are
registered with the United States Patent Office. (Please include the name of the applicable
Grantor, the name of the patent, registration number, and date of registration.) Also attached
hereto as Schedule 9(b) is a list of each Grantor’s patents which are pending with the
United States Patent Office. (Please include the name of the applicable Grantor, the name of the
patent, application number, and date of application.) Also attached hereto as Schedule
9(b) is a list of patents licensed by any Grantor. (Please include the name of the applicable
Grantor, the name of the patent licensed, the name of the licensor or licensee, and the date of the
agreement reflecting such license arrangement.)

          (c) Attached hereto as Schedule 9(c) is a list of each Grantor’s registered
trademarks, trade names, and service marks. (Please include name of each trademark, registration
number, date of registration, and jurisdiction in which the trademark is registered) Also attached
hereto as Schedule 9(c) is a list of each Grantor’s applications for trademarks, trade
names, and service marks. (Please include name of each trademark, application number, date of
application, and jurisdiction in which the application is pending) Also attached hereto as
Schedule 9(c) is a list of trademarks licensed by any Grantor. (Please include the name of
the applicable Grantor, the name of the copyright licensed, the name of the licensor or licensee,
and the date of the agreement reflecting such license arrangement.)

          10. Commercial Tort Claims. Attached hereto as Schedule 10 is a true and
correct list of commercial tort claims with a value in excess of $1,000,000 held by any Grantor,
including a brief description thereof.

[Signature Pages Follow]

 

 

          IN WITNESS WHEREOF, the undersigned has duly executed this certificate on this                      day of
August, 2009.

	 	 	 	 	 
	 	THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	EACH OF THE GRANTORS LISTED ON ANNEX A HERETO

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	EACH OF THE GRANTORS LISTED ON ANNEX B HERETO

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	EACH OF THE GRANTORS LISTED ON ANNEX C HERETO

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

ANNEX A

GRANTORS

 

 

ANNEX B

GRANTORS

 

 

ANNEX C

GRANTORS

 

 

EXHIBIT C to Security Agreement

FORM OF GRANT OF SECURITY INTEREST 

IN UNITED STATES PATENT AND TRADEMARKS

     This GRANT OF SECURITY INTEREST IN UNITED STATES PATENTS AND TRADEMARKS, dated as of August 4,
2009 (this “Grant”), is made by and among (i) THE GREAT ATLANTIC & PACIFIC TEA COMPANY,
INC. (the “Company”), a Maryland corporation, (ii) each subsidiary of the Company listed on
Schedule I attached hereto (each such subsidiary individually a “Guarantor” and
collectively, the “Guarantors”) (the Company and the Guarantors are hereinafter referred
to, collectively, as the “Grantors”), and (iv) WILMINGTON TRUST COMPANY, as collateral
agent (in such capacity, the “Collateral Agent”) for the benefit of Wilmington Trust
Company, as trustee (together with any successor or successors in such capacity, the
“Trustee”) and the Holders (as defined in the Security Agreement), in consideration of the
mutual covenants contained herein and benefits to be derived herefrom.

W i t n e s s e t h:

       WHEREAS, Grantors are party to an Indenture, dated as of the date hereof
(as amended, restated, amended and restated, modified or supplemented from time to time and
including any agreement extending the maturity of, refinancing or otherwise amending, amending and
restating or otherwise modifying or restructuring all or any portion of the obligations of the
Company under the Notes or such agreement or any successor agreement, the “Indenture”)
among the Company, the Guarantors, the Collateral Agent and the Trustee. Each of the Grantors has,
pursuant to the Indenture, unconditionally guaranteed the Obligations (as defined in the Security
Agreement);

     WHEREAS, Grantors are party to a Security Agreement, dated as of the date hereof, in favor of
the Collateral Agent and the Secured Parties (as amended, restated, or otherwise modified from time
to time, the “Security Agreement”); and

     WHEREAS, pursuant to the Security Agreement, Grantors have executed and delivered this Grant
for the purpose of recording and confirming the grant of the security interest of the Collateral
Agent in the Intellectual Property (as defined below) with the United States Patent and Trademark
Office (“PTO”);

     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein and
in the Security Agreement, and for good and valuable consideration, the receipt of which is hereby
acknowledged, the Grantors and the Collateral Agent, on its own behalf and on behalf of the other
Secured Parties (and each of their respective successors or assigns), hereby agree as follows:

     SECTION 1. Defined Terms. Unless otherwise defined herein, terms used herein have the
meaning given to them in the Security Agreement. The following terms shall have the following
meanings:

     “Intellectual Property” shall mean all intellectual and similar property of any
Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents (as defined herein), Licenses, Trademarks (as defined herein), trade
secrets, technology, confidential or proprietary technical and business information, know-how,
show-how, data or information, domain names, mask works, customer lists, vendor lists, subscription
lists, 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.

Form of Grant of Security Interest in United States Patents and Trademarks

C-1

 

     “Patents” shall have the meaning given in the Security Agreement and shall include the
patents set forth on Exhibit A.

     “Trademarks” shall have the meaning given in the Security Agreement and shall include
the trademarks set forth on Exhibit B.

     SECTION 2. GRANT OF SECURITY INTEREST. IN FURTHERANCE AND AS CONFIRMATION OF THE
SECURITY INTEREST GRANTED BY THE GRANTORS TO THE COLLATERAL AGENT (FOR ITS OWN BENEFIT AND THE
BENEFIT OF THE OTHER SECURED PARTIES) UNDER THE SECURITY AGREEMENT, AND AS FURTHER SECURITY FOR THE
PAYMENT OR PERFORMANCE, AS THE CASE MAY BE, IN FULL OF THE OBLIGATIONS, EACH OF THE GRANTORS HEREBY
RATIFIES SUCH SECURITY INTEREST AND GRANTS TO THE COLLATERAL AGENT (FOR ITS OWN BENEFIT AND THE
BENEFIT OF THE OTHER SECURED PARTIES) A CONTINUING SECURITY INTEREST, IN ALL OF THE PRESENT AND
FUTURE RIGHT, TITLE AND INTEREST OF SUCH GRANTOR IN, TO AND UNDER ITS INTELLECTUAL PROPERTY,
WHETHER NOW OWNED OR EXISTING OR HEREAFTER ACQUIRED OR ARISING, TOGETHER WITH ALL PRODUCTS,
PROCEEDS, SUBSTITUTIONS, AND ACCESSIONS THEREOF, INCLUDING ANY CLAIM BY GRANTORS AGAINST THIRD
PARTIES FOR PAST, PRESENT, OR FUTURE INFRINGEMENT, DILUTION, MISAPPROPRIATION, VIOLATION, OR UNFAIR
COMPETITION WITH ANY INTELLECTUAL PROPERTY (COLLECTIVELY, THE “INTELLECTUAL PROPERTY
COLLATERAL”).

     SECTION 3. Intent. This Grant is being executed and delivered by the Grantors for the
purpose of recording and confirming the grant of the security interest of the Collateral Agent in
the Intellectual Property Collateral with the United States Patent and Trademark Office. It is
intended that the security interest granted pursuant to this Grant is granted in conjunction with,
and not in addition to or limitation of, the Security Interest granted to the Collateral Agent, for
its own benefit and the benefit of the other Secured Parties, under the Security Agreement. All
provisions of the Security Agreement shall apply to the Intellectual Property Collateral. The
Collateral Agent shall have the same rights, remedies, powers, privileges and discretions with
respect to the security interests created in the Intellectual Property Collateral as in all other
Collateral. In the event of a conflict between this Grant and the Security Agreement, the terms of
the Security Agreement shall control.

     SECTION 4. Recordation. Each Grantor authorizes and requests that the Commissioner
for Patents, and the Commissioner for Trademarks and any other applicable government officer record
this Grant.

     SECTION 5. Collateral Agent As Attorney-In-Fact. Each of the Grantors hereby
irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as and for such Grantor’s true and lawful agent and
attorney-in-fact in accordance with Section 5.03 of the Security Agreement:

          (a) To supplement and amend from time to time EXHIBITS A and B of this Grant
to include any newly developed, applied for, registered, or acquired Intellectual Property of such
Grantor and any intent-to-use Trademark applications for which a statement of use or an amendment
to allege use has been filed and accepted by the PTO.

          (b) To execute all such instruments, documents, and papers as the Collateral Agent reasonably
determines to be necessary or desirable in connection with the exercise of such rights and remedies
and to cause the sale, license, assignment, transfer, or other disposition of the Intellectual
Property.

Form of Grant of Security Interest in United States Patents and Trademarks

C-2

 

     SECTION 6. Termination; Release of Intellectual Property Collateral . Upon
termination of the Security Interest in the Intellectual Property Collateral in accordance with the
Security Agreement, the Collateral Agent shall promptly execute, acknowledge, and deliver to the
Grantor, at such Grantor’s expense, an instrument in writing in recordable form releasing the
collateral pledge, grant, lien and security interest in the Intellectual Property Collateral under
this Grant. Any execution and delivery of termination statements, releases or other documents
pursuant to this SECTION 6 shall be without recourse to, or warranty by, the Collateral Agent or
any other Secured Party.

[SIGNATURE PAGE FOLLOWS]

Form of Grant of Security Interest in United States Patents and Trademarks

C-3

 

     IN WITNESS WHEREOF, the Grantors and the Collateral Agent have caused this Grant to be
executed by their duly authorized officers as of the date first above written.

	 	 	 	 	 
	GRANTORS:	THE GREAT ATLANTIC & PACIFIC

TEA COMPANY, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 	 	 
	 	 	THE ENTITIES LISTED ON SCHEDULE I HERETO, as Guarantors
	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Signature Page to Grant of Security Interest in United States Patents and Trademarks

 

 

	 	 	 	 	 
	COLLATERAL AGENT:	WILMINGTON TRUST COMPANY, as

Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Signature Page to Grant of Security Interest in United States Patents and Trademarks

 

 

EXHIBIT A

Patents

Exhibit A to Grant of Security Interest in United States Patents and Trademarks

 

 

EXHIBIT B

Trademarks

Exhibit B to Grant of Security Interest in United States Patents and Trademarks

 

 

Schedule I

(Guarantors)

Schedule I to Grant of Security Interest in United States Patents and Trademarks

 

 

EXHIBIT D to Security Agreement

FORM OF GRANT OF SECURITY INTEREST

IN UNITED STATES COPYRIGHTS

     This GRANT OF SECURITY INTEREST IN UNITED STATES COPYRIGHTS, dated as of August 4, 2009 (this
“Grant”), is made by and among (i) THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. (the
“Company”), a Maryland corporation, (ii) each subsidiary of the Company listed on
Schedule I attached hereto (each such subsidiary individually a “Guarantor” and
collectively, the “Guarantors”) (the Company and the Guarantors are hereinafter referred
to, collectively, as the “Grantors”), and (iv) WILMINGTON TRUST COMPANY, as collateral
agent (in such capacity, the “Collateral Agent”) for the benefit of Wilmington Trust
Company, as trustee (together with any successor or successors in such capacity, the
“Trustee”) and the Holders (as defined in the Security Agreement), in consideration of the
mutual covenants contained herein and benefits to be derived herefrom.

W i t n e s s e t h:

       WHEREAS, Grantors are party to an Indenture, dated as of the date hereof
(as amended, restated, amended and restated, modified or supplemented from time to time and
including any agreement extending the maturity of, refinancing or otherwise amending, amending and
restating or otherwise modifying or restructuring all or any portion of the obligations of the
Company under the Notes or such agreement or any successor agreement, the “Indenture”)
among the Company, the Guarantors, the Collateral Agent and the Trustee. Each of the Grantors has,
pursuant to the Indenture, unconditionally guaranteed the Obligations (as defined in the Security
Agreement);

     WHEREAS, Grantors are party to a Security Agreement, dated as of the date hereof, in favor of
the Collateral Agent and the Secured Parties (as amended, restated, or otherwise modified from time
to time, the “Security Agreement”); and

     WHEREAS, pursuant to the Security Agreement, Grantors have executed and delivered this Grant
for the purpose of recording and confirming the grant of the security interest of the Collateral
Agent in the Intellectual Property (as defined below) with the United States Copyright Office;

     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein and
in the Security Agreement, and for good and valuable consideration, the receipt of which is hereby
acknowledged, the Grantors and the Collateral Agent, on its own behalf and on behalf of the other
Secured Parties (and each of their respective successors or assigns), hereby agree as follows:

     SECTION 1. Defined Terms. Unless otherwise defined herein, terms used herein have the
meaning given to them in the Security Agreement. The following terms shall have the following
meanings:

     “Copyrights” shall have the meaning given in the Security Agreement and shall include
the copyrights set forth on Exhibit A.

     “Intellectual Property” shall mean all intellectual and similar property of any
Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Copyrights (as defined herein), Licenses, trade secrets, technology,
confidential or proprietary technical and business information, know-how, show-how, data or
information, domain names, mask works, customer lists, vendor lists, subscription lists, software
and databases and all embodiments or fixations thereof and related documentation, registrations and

Form of Grant of Security Interest in United States Copyrights

D-1

 

franchises, and all additions, improvements and accessions to, and books and records
describing or used in connection with, any of the foregoing.

     SECTION 2. GRANT OF SECURITY INTEREST. IN FURTHERANCE AND AS CONFIRMATION OF THE
SECURITY INTEREST GRANTED BY THE GRANTORS TO THE COLLATERAL AGENT (FOR ITS OWN BENEFIT AND THE
BENEFIT OF THE OTHER SECURED PARTIES) UNDER THE SECURITY AGREEMENT, AND AS FURTHER SECURITY FOR THE
PAYMENT OR PERFORMANCE, AS THE CASE MAY BE, IN FULL OF THE OBLIGATIONS, EACH OF THE GRANTORS HEREBY
RATIFIES SUCH SECURITY INTEREST AND GRANTS TO THE COLLATERAL AGENT (FOR ITS OWN BENEFIT AND THE
BENEFIT OF THE OTHER SECURED PARTIES) A CONTINUING SECURITY INTEREST, IN ALL OF THE PRESENT AND
FUTURE RIGHT, TITLE AND INTEREST OF SUCH GRANTOR IN, TO AND UNDER ITS INTELLECTUAL PROPERTY,
WHETHER NOW OWNED OR EXISTING OR HEREAFTER ACQUIRED OR ARISING, TOGETHER WITH ALL PRODUCTS,
PROCEEDS, SUBSTITUTIONS, AND ACCESSIONS THEREOF, INCLUDING ANY CLAIM BY GRANTORS AGAINST THIRD
PARTIES FOR PAST, PRESENT, OR FUTURE INFRINGEMENT, DILUTION, MISAPPROPRIATION, VIOLATION, OR UNFAIR
COMPETITION WITH ANY INTELLECTUAL PROPERTY (COLLECTIVELY, THE “INTELLECTUAL PROPERTY
COLLATERAL”).

     SECTION 3. Intent. This Grant is being executed and delivered by the Grantors for the
purpose of recording and confirming the grant of the security interest of the Collateral Agent in
the Intellectual Property Collateral with the United States Copyright Office. It is intended that
the security interest granted pursuant to this Grant is granted in conjunction with, and not in
addition to or limitation of, the Security Interest granted to the Collateral Agent, for its own
benefit and the benefit of the other Secured Parties, under the Security Agreement. All provisions
of the Security Agreement shall apply to the Intellectual Property Collateral. The Collateral
Agent shall have the same rights, remedies, powers, privileges and discretions with respect to the
security interests created in the Intellectual Property Collateral as in all other Collateral. In
the event of a conflict between this Grant and the Security Agreement, the terms of the Security
Agreement shall control.

     SECTION 4. Recordation. Each Grantor authorizes and requests that the Register of
Copyrights, and any other applicable government officer record this Grant.

     SECTION 5. Collateral Agent As Attorney-In-Fact. Each of the Grantors hereby
irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as and for such Grantor’s true and lawful agent and
attorney-in-fact in accordance with Section 5.03 of the Security Agreement:

          (a) To supplement and amend from time to time EXHIBIT A of this Grant to include any
newly developed, applied for, registered, or acquired Intellectual Property of such Grantor.

          (b) To execute all such instruments, documents, and papers as the Collateral Agent reasonably
determines to be necessary or desirable in connection with the exercise of such rights and remedies
and to cause the sale, license, assignment, transfer, or other disposition of the Intellectual
Property.

     SECTION 6. Termination; Release of Intellectual Property Collateral. Upon termination
of the Security Interest in the Intellectual Property Collateral in accordance with the Security
Agreement, the Collateral Agent shall promptly execute, acknowledge, and deliver to the Grantor, at
such Grantor’s expense, an instrument in writing in recordable form releasing the collateral
pledge, grant, lien and security interest in the Intellectual Property Collateral under this Grant.
Any execution and delivery of

Form of Grant of Security Interest in United States Copyrights

D-2

 

termination statements, releases or other documents pursuant to this SECTION 6 shall be without
recourse to, or warranty by, the Collateral Agent or any other Secured Party.

[SIGNATURE PAGE FOLLOWS]

Form of Grant of Security Interest in United States Copyrights

D-3

 

     IN WITNESS WHEREOF, the Grantors and the Collateral Agent have caused this Grant to be
executed by their duly authorized officers as of the date first above written.

	 	 	 	 	 	 	 
	GRANTORS:	 	THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	THE ENTITIES LISTED ON SCHEDULE I HERETO, as Guarantors	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Signature Page to Grant of Security Interest in United States Copyrights

 

 

	 	 	 	 	 	 	 
	COLLATERAL AGENT:	 	WILMINGTON TRUST COMPANY, as Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

Signature Page to Grant of Security Interest in United States Copyrights

 

 

EXHIBIT A

Copyrights

Exhibit A to Grant of Security Interest in United States Copyrights

 

 

Schedule I

(Guarantors)

Schedule I to Grant of Security Interest in United States Copyrightsexv10w1

EXHIBIT 10.1

     Non-Executive Form

ARBITRON INC. 2008 EQUITY COMPENSATION PLAN

NON-STATUTORY STOCK OPTION AGREEMENT

     THIS AGREEMENT evidences the grant by Arbitron Inc. (the “Company”) on                     , 20___(the
“Date of Grant”) to [Name] (the “Optionee”) of an option to purchase shares of the Company’s common
stock.

     A. The Company has adopted the Arbitron Inc. 2008 Equity Compensation Plan (as may be amended
or supplemented, the “Plan”) authorizing the Board of Directors of the Company, or a committee as
provided for in the Plan (the Board or such a committee to be referred to as the “Committee”), to
grant stock options to employees of the Company and its Subsidiaries (as defined in the Plan).

     B. The Company desires to give the Optionee an inducement to acquire a proprietary interest in
the Company and an added incentive to advance the interests of the Company by granting to the
Optionee an option to purchase shares of common stock of the Company pursuant to the Plan.

     Accordingly, the parties agree as follows:

1. Grant of Option.

     The Company has granted to the Optionee the right, privilege and option (the “Option”) to
purchase [Shares] shares (the “Option Shares”) of the Company’s common stock, $0.50 par value (the
“Common Stock”), according to the terms and subject to the conditions hereinafter set forth and as
set forth in the Plan. The Option is not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2. Option Exercise Price.

     The per share price to be paid by Optionee in the event of an exercise of the Option will be
$                    .

3. Duration of Option and Time of Exercise.

     3.1 Initial Period of Exercisability. Except as provided in Sections 3.2 and 3.3
hereof, the Option shall become exercisable with respect to one-third of the Option Shares on each
of the first, second and third anniversaries of the Date of Grant, assuming the Optionee’s
continued employment. The foregoing rights to exercise the Option will be cumulative with respect
to the Option Shares becoming exercisable on each such date, but in no event will the Option be
exercisable after, and the Option will become void and expire as to all unexercised Option Shares
at, 5:00 p.m. (Eastern Standard Time) on the tenth anniversary of the Date of Grant (the “Time of
Option Termination”).

     3.2 Termination of Employment.

     (a) Termination Due to Death, Disability, or Retirement. In the event the
Optionee’s employment with the Company and all Subsidiaries is terminated by reason of death
or disability or ends with Retirement, the Option will become immediately exercisable
in full and remain

 

 

exercisable until the [earlier of the first anniversary of such employment termination or the] Time of Option Termination.

     (b) Termination for Reasons Other Than Death, Disability, or Retirement. In
the event that the Optionee’s employment with the Company and all Subsidiaries is terminated
for any reason other than death, disability, or Retirement or the Optionee is in the employ
of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless the
Optionee continues in the employ of the Company or another Subsidiary), all rights of the
Optionee under the Plan and this Agreement will immediately terminate without notice of any
kind, and the Option will no longer be exercisable; provided, however, that, if such
termination is due to any reason other than termination by the Company or any Subsidiary for
Cause (as defined in Section 9 of this Agreement), the Option will remain exercisable to the
extent exercisable as of such termination for a period of three months after such
termination (but in no event after the Time of Option Termination).

     3.3 Change in Control.

     (a) Impact of Change in Control. If a Change in Control Event (as defined in
Section 9 of this Agreement) of the Company occurs the Option will become exercisable as
provided in any then applicable employment or retention agreement by and between the Company
and the Optionee and will remain exercisable until the first anniversary of the date the
Option becomes exercisable, if at all, except as the Committee determines
otherwise in connection with the Change in Control Event. In addition, if a Change in
Control Event of the Company occurs, the Committee, in its sole discretion and without the
consent of the Optionee, may determine that the Optionee will receive, with respect to some
or all of the Option Shares, as of the effective date of any such Change in Control Event of
the Company, cash in an amount equal to the excess of the Fair Market Value (as defined in
the Plan) of such Option Shares as determined by taking into account such Change in Control
Event of the Company over the option exercise price per share of the Option.

     (b) Authority to Modify Change in Control Provisions. Prior to a Change in
Control Event, the Optionee will have no rights under this Section 3.3, and the Committee
will have the authority, in its sole discretion, to rescind, modify, or amend this Section
3.3 without the consent of the Optionee.

4. Manner of Option Exercise.

     4.1 Notice. This Option may be exercised by the Optionee in whole or in part from
time to time, subject to the conditions contained in the Plan and in this Agreement, by delivery,
in person, by facsimile or electronic transmission or through the mail, to the Company at its
principal executive office in Columbia, Maryland (Attention: Corporate Secretary), of a written
notice of exercise. Such notice must be in a form satisfactory to the Committee, must identify the
Option, must specify the number of Option Shares with respect to which the Option is being
exercised, and must be signed by the person or persons so exercising the Option. In the event that
the Option is being exercised, as provided by the Plan and Section 3.2 of this Agreement, by any
person or persons other than the Optionee, the notice must be accompanied by appropriate proof of
right of such person or persons to exercise the Option. If the Optionee retains the Option Shares
purchased, as soon as practicable after the effective exercise of the Option, the Optionee will be
recorded on the stock transfer books of the Company as the owner of the Option Shares purchased.

2

 

     4.2 Payment. At the time of exercise of the Option, the Optionee must pay the total
exercise price of the Option Shares to be purchased entirely in cash (including a check, bank draft
or money order, payable to the order of the Company), though a cashless exercise as described in
Section 5(f)(2) of the Plan, by such other method approved by the Committee, or by a combination
of such methods.

5. Rights and Restrictions of Optionee; Transferability.

     5.1 Employment. Nothing in this Agreement will interfere with or limit in any way the
right of the Company or any Subsidiary to terminate the employment of the Optionee at any time, nor
confer upon the Optionee any right to continue in the employ of the Company or any Subsidiary at
any particular position or rate of pay or for any particular period of time.

     5.2 Rights as a Stockholder; Effect on Running the Business. The Optionee will have
no rights as a stockholder unless and until all conditions to the effective exercise of the Option
(including, without limitation, the conditions set forth in Sections 4 and 6 of this Agreement)
have been satisfied and the Optionee has become the holder of record of such shares. No adjustment
will be made for dividends or distributions with respect to the Option Shares as to which there is
a record date preceding the date the Optionee becomes the holder of record of such Option Shares,
except as may otherwise be provided in the Plan or determined by the Committee in its sole
discretion. The Optionee understands and agrees that the existence of an Option will not affect in
any way the right or power of the Company or its stockholders to make or authorize any adjustments,
recapitalizations, reorganizations, or other changes in the Company’s capital structure or its
business, or any merger or consolidation of the Company, or any issuance of bonds, debentures,
preferred or other stock, with preference ahead of or convertible into, or otherwise affecting the
Company’s common stock or the rights thereof, or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business, or any other corporate act or
proceeding, whether or not of a similar character to those described above.

     5.3 Restrictions on Transfer. Except pursuant to testamentary will or the laws of
descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of
the Optionee in the Option prior to exercise may be assigned or transferred, or subjected to any
lien, during the lifetime of the Optionee, either voluntarily or involuntarily, directly or
indirectly, by operation of law or otherwise. The Optionee will, however, subject to applicable
laws be entitled to designate a beneficiary to receive the Option upon such Optionee’s death in the
manner provided by the Plan, and, in the event of the Optionee’s death, exercise of the Option (to
the extent permitted pursuant to Section 3.2(a) of this Agreement) may be made by the Optionee’s
designated beneficiary.

     5.4 Restrictions Regarding Employment.

     (a) The Optionee agrees that he or she will not take any Adverse Actions (as defined
below) against the Company or any Subsidiary at any time during the period that the Option
is or may yet become exercisable in whole or in part or at any time before one year
following the Optionee’s termination of employment with the Company or any Subsidiary,
whichever is later (the “Restricted Period”). The Optionee acknowledges that damages which
may arise from a breach of this Section 5.4 may be impossible to ascertain or prove with
certainty. Notwithstanding anything in this Agreement or the Plan to the contrary, in the
event that the Company determines in its sole discretion that the Optionee has taken Adverse
Actions against the Company or any Subsidiary at any time during the Restricted Period, in
addition to other legal remedies which may be available, (i) the Company will be entitled to
an immediate injunction from a court of competent jurisdiction to end such Adverse Action,
without further proof of damage, (ii) the Committee will have the authority in its sole
discretion to terminate immediately all rights of the Optionee under the Plan and this Agreement without notice
of any kind, and (iii)

3

 

the Committee will have the authority in its sole discretion to rescind the exercise of all or any portion of the Option to the extent that such exercise
occurred within six months prior to the date the Optionee first commences any such Adverse
Actions and require the Optionee to disgorge any profits (however defined by the Committee)
realized by the Optionee relating to such exercised portion of the Option or any Option
Shares issued or issuable upon such exercise. Such disgorged profits paid to the Company
must be made in cash (including check, bank draft or money order) or, with the Committee’s
consent, shares of Common Stock with a Fair Market Value on the date of payment equal to the
amount of such payment. The Company will be entitled to withhold and deduct from future
wages of the Optionee (or from other amounts that may be due and owing to the Optionee from
the Company or a Subsidiary) or make other arrangements for the collection of all amounts
necessary to satisfy such payment obligation.

     (b) For purposes of this Agreement, an “Adverse Action” will mean any of the following:
(i) engaging in any commercial activity in competition with any part of the business of the
Company or any Subsidiary as conducted during the Restricted Period for which the Optionee
has or had access to trade secrets and/or confidential information; (ii) diverting or
attempting to divert from the Company or any Subsidiary any business of any kind, including,
without limitation, interference with any business relationships with suppliers, customers,
licensees, licensors, clients or contractors; (iii) participating in the ownership,
operation or control of, or being employed by, or connected in any manner with any person or
entity which solicits, offers or provides any services or products similar to those which
the Company or any Subsidiary offers to its customers or prospective customers, (iv) making,
or causing or attempting to cause any other person or entity to make, any statement, either
written or oral, or convey any information about the Company or any Subsidiary that is
disparaging or that in any way reflects negatively on the Company or any Subsidiary; or (v)
engaging in any other activity that is hostile, contrary or harmful to the interests of the
Company or any Subsidiary, including, without limitation, influencing or advising any person
who is employed by or in the service of the Company or any Subsidiary to leave such
employment or service to compete with the Company or any Subsidiary or to enter into the
employment or service of any actual or prospective competitor of the Company or any
Subsidiary, influencing or advising any competitor of the Company or any Subsidiary to
employ to otherwise engage the services of any person who is employed by or in the service
of the Company or any Subsidiary, or improperly disclosing or otherwise misusing any trade
secrets or confidential information regarding the Company or any Subsidiary.

     (c) Should any provision of this Section 5.4 of the Agreement be held invalid or
illegal, such illegality shall not invalidate the whole of this Section 5.4 of the
Agreement, but, rather, the Agreement shall be construed as if it did not contain the
illegal part or narrowed to permit its enforcement, and the rights and obligations of the
parties shall be construed and enforced accordingly. In furtherance of and not in limitation
of the foregoing, the Optionee expressly agrees that should the duration of or business
activities covered by, any provision of this Agreement be in excess of that which is valid
or enforceable under applicable law, then such provision shall be construed to cover only
that duration, extent or activities that may validly or enforceably be covered. The
Optionee acknowledges the uncertainty of the law in this respect and expressly stipulates
that this Agreement shall be construed in a manner that renders its provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible under
applicable law. This Section 5.4 of the Agreement does not replace and is in addition to
any other agreements the Optionee may have with the Company or any of its Subsidiaries on
the matters addressed herein.

6. Securities Law and Other Restrictions.

4

 

     Notwithstanding any other provision of the Plan or this Agreement, the Company will not be
required to issue, and the Optionee may not sell, assign, transfer or otherwise dispose of, any
Option Shares, unless (a) there is in effect with respect to the Option Shares a registration
statement under the Securities Act of 1933, as amended, and any applicable state or foreign
securities laws or an exemption from such registration, and (b) there has been obtained any other
consent, approval or permit from any other regulatory body which the Committee, in its sole
discretion, deems necessary or advisable. The Company may condition such issuance, sale or
transfer upon the receipt of any representations or agreements from the parties involved, and the
placement of any legends on certificates representing Option Shares, as may be deemed necessary or
advisable by the Company in order to comply with such securities law or other restrictions.

7. Withholding Taxes.

     The Company is entitled to (a) withhold and deduct from future wages of the Optionee (or from
other amounts that may be due and owing to the Optionee from the Company), or make other
arrangements for the collection of, all legally required amounts necessary to satisfy any federal
or provincial withholding tax requirements attributable to the Option, or (b) require the Optionee
promptly to remit the amount of such withholding to the Company before acting on the Optionee’s
notice of exercise of the Option. In the event that the Company is unable to withhold such
amounts, for whatever reason, the Optionee agrees to pay to the Company an amount equal to the
amount the Company would otherwise be required to withhold under federal, state or local law.

8. Certain Definitions. For purposes of this Agreement, the following additional
definitions will apply:

     (a) “Cause” will have the meaning set forth in any employment or other agreement or
policy applicable to the Optionee or, if no such agreement or policy exists, will mean (i)
dishonesty, fraud, misrepresentation, theft, embezzlement or injury or attempted injury, in
each case related to the Company or any Subsidiary, (ii) any unlawful or criminal activity
of a serious nature, (iii) any breach of duty, habitual neglect of duty or unreasonable job
performance, or (iv) any material breach of any employment, service, confidentiality or
noncompete agreement entered into with the Company or any Subsidiary.

     (b) “Change in Control Event” will have the meaning set forth in the Plan plus such
other event or transaction as the Board shall determine constitutes a Change in Control, or
such other meaning as may be adopted by the Committee from time to time in its sole
discretion.

     (c) “Retirement” means the termination (other than for Cause or by reason of death or
disability) of an Optionee’s employment or other service on or after the date on which the
Optionee has attained the age of 55 and has completed 10 years of continuous service to the
Company or any Subsidiary (such period of service to be determined in accordance with the
retirement/pension plan or practice of the Company or Subsidiary then covering the Optionee,
provided that if the Optionee is not covered by any such plan or practice, the Optionee will
be deemed to be covered by the Company’s plan or practice for purposes of this
determination).

9. Subject to Plan.

     The Option and the Option Shares granted and issued pursuant to this Agreement have been
granted and issued under, and are subject to the terms of, the Plan. The terms of the Plan are
incorporated by reference in this Agreement in their entirety, and the Optionee, by execution of
this Agreement, acknowledges having received a copy of the Plan. The provisions of this Agreement
will be interpreted in a manner consistent with the Plan, and any ambiguities in this Agreement
will be interpreted by

5

 

reference to the Plan. In the event that any provision of this Agreement is
inconsistent with the terms of the Plan, the terms of the Plan will prevail.

10. Miscellaneous.

     10.1 Binding Effect. This Agreement will be binding upon the heirs, executors,
administrators and successors of the parties to this Agreement.

     10.2 Governing Law. This Agreement and all rights and obligations under this
Agreement will be construed in accordance with the Plan and governed by the laws of the State of
Delaware, without regard to conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive laws of another jurisdiction.

     10.3 Entire Agreement. This Agreement and the Plan set forth the entire agreement and
understanding of the parties to this Agreement with respect to the grant and exercise of the Option
and the administration of the Plan and supersede all prior agreements, arrangements, plans and
understandings relating to the grant and exercise of the Option and the administration of the Plan.

     10.4 Amendment and Waiver. Other than as provided in the Plan, this Agreement may be
amended, waived, modified or canceled only by a written instrument executed by the parties to this
Agreement or, in the case of a waiver, by the party waiving compliance.

     IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.

	 	 	 	 	 
	 	ARBITRON INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

6

 

	 	 	 	 	 

PARTICIPANT’S ACCEPTANCE

     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Plan.

	 	 	 	 	 
	 	PARTICIPANT:

 	 
	 	 	 
	 	Address: 	 	 
	 	 	 	 
	 

7

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