Document:

Exhibit 10.4
 

 

PLEDGE AND SECURITY AGREEMENT

made by

FIBERTOWER CORPORATION

a Delaware corporation,

FIBERTOWER
NETWORK SERVICES CORP.

a Delaware corporation,

ART
LEASING, INC.

a Delaware corporation,

TELIGENT
SERVICES ACQUISITION, INC.

a Delaware corporation,

ART
LICENSING CORPORATION

a Delaware corporation,

FIBERTOWER
SOLUTIONS CORPORATION

a Delaware corporation,

and

THE OTHER GRANTORS FROM TIME TO TIME PARTY HERETO

in favor of

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Collateral Agent on behalf of the Secured Parties

 

Dated as of November 9,
2006

   
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  SECTION 1.

  	
   

  	
  DEFINED TERMS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
  1.2

  	
   

  	
  Other Definitional Provisions

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  GRANT OF SECURITY INTEREST

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Grant of Security Interest by Grantors

  	
   

  	
  10

  
	
  2.2

  	
   

  	
  Limitations to Collateral

  	
   

  	
  12

  
	
  2.3

  	
   

  	
  Intercreditor Agreement

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Title; No Other Liens

  	
   

  	
  12

  
	
  3.2

  	
   

  	
  Perfected First Priority Liens

  	
   

  	
  13

  
	
  3.3

  	
   

  	
  Name; Jurisdiction of Organization, etc.

  	
   

  	
  13

  
	
  3.4

  	
   

  	
  Inventory, Equipment and Books and Records

  	
   

  	
  14

  
	
  3.5

  	
   

  	
  Farm Products

  	
   

  	
  14

  
	
  3.6

  	
   

  	
  Investment Property

  	
   

  	
  14

  
	
  3.7

  	
   

  	
  Receivables

  	
   

  	
  14

  
	
  3.8

  	
   

  	
  Intellectual Property

  	
   

  	
  15

  
	
  3.9

  	
   

  	
  Vehicles

  	
   

  	
  15

  
	
  3.10

  	
   

  	
  Commercial Tort Claims

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  COVENANTS

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Delivery and Control of Instruments, Chattel Paper,
  Investment Property and Deposit Accounts

  	
   

  	
  15

  
	
  4.2

  	
   

  	
  Maintenance of Perfected Security Interest; Further
  Documentation

  	
   

  	
  17

  
	
  4.3

  	
   

  	
  Changes in Locations, Name, Jurisdiction of
  Incorporation, etc.

  	
   

  	
  17

  
	
  4.4

  	
   

  	
  Investment Property

  	
   

  	
  18

  
	
  4.5

  	
   

  	
  Intellectual Property

  	
   

  	
  18

  
	
  4.6

  	
   

  	
  Non-Deliverable Collateral

  	
   

  	
  19

  
	
  4.7

  	
   

  	
  Vehicles

  	
   

  	
  19

  
	
  4.8

  	
   

  	
  Commercial Tort Claims

  	
   

  	
  19

  
	
  4.9

  	
   

  	
  Termination of UCC Financing Statements

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  REMEDIAL PROVISIONS

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Certain Matters Relating to Receivables

  	
   

  	
  20

  
	
  5.2

  	
   

  	
  Communications with Obligors; Grantors Remain Liable

  	
   

  	
  20

  
	
  5.3

  	
   

  	
  Pledged Securities

  	
   

  	
  21

  
	
  5.4

  	
   

  	
  Proceeds to be Turned Over To Collateral Agent

  	
   

  	
  22

  
	
  5.5

  	
   

  	
  Application of Proceeds

  	
   

  	
  22

  
	
  5.6

  	
   

  	
  Code and Other Remedies

  	
   

  	
  22

  
	
  5.7

  	
   

  	
  Registration Rights

  	
   

  	
  24

  
	
  5.8

  	
   

  	
  Waiver; Deficiency

  	
   

  	
  25

  
	
  5.9

  	
   

  	
  Exercise of Control

  	
   

  	
  25

  

 i
 

 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  SECTION 6.

  	
   

  	
  THE COLLATERAL AGENT

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Collateral Agent’s Appointment as Attorney-in-Fact,
  etc.

  	
   

  	
  25

  
	
  6.2

  	
   

  	
  Duty of Collateral Agent

  	
   

  	
  27

  
	
  6.3

  	
   

  	
  Filing of Financing Statements

  	
   

  	
  27

  
	
  6.4

  	
   

  	
  Authority of Collateral Agent

  	
   

  	
  27

  
	
  6.5

  	
   

  	
  Appointment of Co-Agent

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Amendments in Writing

  	
   

  	
  28

  
	
  7.2

  	
   

  	
  Notices

  	
   

  	
  28

  
	
  7.3

  	
   

  	
  No Waiver by Course of Conduct; Cumulative Remedies

  	
   

  	
  29

  
	
  7.4

  	
   

  	
  Enforcement Expenses; Indemnification

  	
   

  	
  29

  
	
  7.5

  	
   

  	
  Successors and Assigns

  	
   

  	
  30

  
	
  7.6

  	
   

  	
  Set-Off

  	
   

  	
  30

  
	
  7.7

  	
   

  	
  Counterparts

  	
   

  	
  30

  
	
  7.8

  	
   

  	
  Severability

  	
   

  	
  30

  
	
  7.9

  	
   

  	
  Section Headings

  	
   

  	
  31

  
	
  7.10

  	
   

  	
  Integration

  	
   

  	
  31

  
	
  7.11

  	
   

  	
  GOVERNING LAW

  	
   

  	
  31

  
	
  7.12

  	
   

  	
  Submission to Jurisdiction; Waivers

  	
   

  	
  31

  
	
  7.13

  	
   

  	
  Waivers by FiberTower

  	
   

  	
  32

  
	
  7.14

  	
   

  	
  Acknowledgments

  	
   

  	
  32

  
	
  7.15

  	
   

  	
  Additional Grantors

  	
   

  	
  33

  
	
  7.16

  	
   

  	
  Releases

  	
   

  	
  33

  
	
  7.17

  	
   

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  33

  
	
  7.18

  	
   

  	
  Certain Regulatory Requirements

  	
   

  	
  33

  
	
  7.19

  	
   

  	
  Subordination

  	
   

  	
  34

  

 

 ii

PLEDGE AND SECURITY
AGREEMENT

This PLEDGE AND SECURITY AGREEMENT, dated as of
November 9, 2006 (as amended, amended and restated, supplemented, replaced or
otherwise modified from time to time, this “Agreement”), is made by
FIBERTOWER CORPORATION, a Delaware corporation (“FiberTower”),
FIBERTOWER NETWORK SERVICES CORP., a Delaware corporation (“FNS”), ART
LEASING, INC., a Delaware corporation (“Art Leasing”), TELIGENT SERVICES
ACQUISITION, INC., a Delaware corporation (“Teligent”), ART LICENSING
CORPORATION, a Delaware corporation (“Art Licensing”), and FIBERTOWER
SOLUTIONS CORPORATION, a Delaware corporation (“Solutions” and,
collectively with FNS, Art Leasing, Teligent, Art Licensing and any other
entity that may become a party to the Note Guarantee (as defined below) from
time to time, the “Guarantors”, and together with FiberTower and any
other entity that may become a party hereto from time to time pursuant to
Section 7.15 hereof, the “Grantors”), in favor of WELLS FARGO BANK,
NATIONAL ASSOCIATION, as collateral agent on behalf of the Secured Parties, as
defined herein (together with its successors and assigns in such capacity, the “Collateral
Agent”).

RECITALS:

WHEREAS, concurrently herewith, FiberTower is issuing
$402,500,000 aggregate principal amount of its 9.00% Convertible Senior Secured
Notes due 2012 (together with all other notes issued under the Indenture,
including all notes issued in exchange or replacement thereof, the “Notes”)
pursuant to that certain Indenture, dated as of the date hereof (as amended,
amended and restated, supplemented, replaced or otherwise modified from time to
time, the “Indenture”), among FiberTower, the Guarantors, Wells Fargo
Bank, National Association (“Wells Fargo”), as trustee on behalf of the
Noteholders;

WHEREAS, FiberTower may from time to time issue
additional Notes (“Additional Notes”) under the Indenture;

WHEREAS, concurrently herewith, the Guarantors have
executed a Guarantee, dated as of the date hereof (the “Note Guarantee”),
in favor of the Trustee and the Noteholders, pursuant to which the Guarantors
have agreed to guarantee, jointly and severally, the obligations of FiberTower
under the Indenture;

WHEREAS, in the future to the extent any of the
Grantors enters into a Working Capital Facility (as defined below) or in the
event any Pari Passu Indebtedness (as defined below) is incurred after the date
of this Agreement, the Trustee, the Collateral Agent, the Working Capital
Facility Collateral Agent, the Pari Passu Collateral Agent (as defined below),
FiberTower and the Guarantors will enter into an intercreditor agreement
substantially in the form of Exhibit G to the Indenture (as amended, amended
and restated, supplemented, replaced or otherwise modified from time to time,
the “Intercreditor Agreement”), which sets forth certain agreements
between the Trustee, Collateral Agent and the Noteholders, on the one hand, and
the Working Capital Facility Collateral Agent, the Pari Passu Collateral Agent
and the Senior Lenders, on the other

 

hand, with respect to the
priority of the liens created hereunder, the enforcement of remedies and the
allocation of the proceeds of any realization upon the Collateral (as defined
below);

WHEREAS, pursuant to the Indenture, the Noteholders
have agreed to purchase the Notes upon the terms and subject to the conditions
set forth therein;

WHEREAS, each Grantor will derive substantial direct
and indirect benefit from the purchase of the Notes by the Noteholders under
the Indenture; and

WHEREAS, it is a condition precedent to the obligation
of the Trustee, on behalf of the Noteholders, to enter into the Indenture and
of the Noteholders to purchase the Notes, that the Grantors shall have executed
and delivered this Agreement to the Collateral Agent for the benefit of the
Secured Parties (as defined below);

NOW, THEREFORE, in consideration of the foregoing
premises and to induce the Trustee, on behalf of the Noteholders, to enter into
the Indenture and the Noteholders to purchase the Notes, each Grantor hereby
agrees with the Collateral Agent, for the benefit of the Secured Parties, as
follows:

SECTION 1.  DEFINED
TERMS

1.1           Definitions.

(a)           Unless otherwise specifically stated,
any capitalized terms used in this Agreement which are not otherwise defined
herein shall have the respective meanings ascribed to such terms in the
Indenture.  The following terms which are
defined in the UCC (as defined below) on the date hereof are used herein as so
defined:  Accounts, Certificated
Security, Chattel Paper, Commercial Tort Claims, Commodity Account, Commodity
Contract, Commodity Intermediary, Documents, Entitlement Order, Equipment, Farm
Products, Financial Asset, Goods, Instruments, Inventory, Letters of Credit,
Letter-of-Credit Rights, Money, Payment Intangible, Securities Account,
Securities Intermediary, Security, Security Entitlement, Supporting Obligation
and Uncertificated Security.

(b)           The following terms shall have the
following meanings:

“Additional
Notes”: as defined in the recitals to this Agreement.

“After-Acquired
Intellectual Property”:  as defined
in Section 4.5(b).

“Agreement”:
as defined in the preamble to this Agreement.

“Art
Leasing”:  as defined in the preamble
to this Agreement.

“Art
Licensing”:  as defined in the
preamble to this Agreement.

“Banc
One” means, individually and collectively, Banc One Trust Company, N.A., in
its capacity as agent on behalf of the parties to the Banc One Purchase
Agreements, as purchasers, and its successors and assigns, including any
replacement or successor agent

 2
 

 

thereunder, together with the purchasers party thereto
and their respective successors and assigns.

“Banc
One Purchase Agreements” means, the Purchase Agreement, dated as of
December 20, 2001, among Banc One and Advanced Radio Telecom Corp., together
with any and all other agreements, documents and instruments executed and/or
delivered in connection therewith by any Grantor or any Grantor’s predecessor
in interest.

“Capital
Lease Obligation”:  at the time any
determination is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a
balance sheet prepared in accordance with GAAP, and the stated maturity thereof
shall be the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be prepaid by the
lessee without payment of a penalty.

“Capital
Stock”:  any and all shares,
interests, participations or other equivalents (however designated) of capital
stock of a corporation, any and all classes of membership or member’s interests
in a limited liability company, any and all classes of partnership interests in
a partnership, any and all equivalent ownership interests in a Person (other
than any Governmental Authority) and any and all warrants, rights or options to
purchase any of the foregoing.

“Collateral”:  as defined in Section 2.1.

“Collateral
Account”:  any collateral account
established by the Collateral Agent as provided in Section 5.1(a) or 5.4.

“Collateral
Agent”:  as defined in the recitals
to this Agreement.

“Control
Agreement”:  any control agreement
from time to time entered into among any Grantor, the Collateral Agent and any
other party, in the form of Exhibit C, D or E, as the case
may be, or in such form satisfactory to the Collateral Agent.

“Copyright
Licenses”:  any written agreement
naming any Grantor as licensor or licensee (including, without limitation,
those listed in Schedule 5), granting any right under any
Copyright, including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.

“Copyrights”:  (i) all copyrights, whether or not the
underlying works of authorship have been published, including, but not limited
to, copyrights in software and databases, all Mask Works (as defined in 17
U.S.C. 901 of the U.S. Copyright Act) and all such underlying works of
authorship and other intellectual property rights therein, all copyrights of
works based on, incorporated in, derived from or relating to works covered by
such copyrights, all right, title and interest to make and exploit all
derivative works based on or adopted from works covered by such copyrights, and
all copyright registrations and copyright applications, and any renewals or
extensions thereof, including, without limitation, each registration and
application identified in Schedule 5, (ii) the rights to print,
publish and distribute any of the foregoing, (iii) the right to sue or
otherwise recover for any and all past, present and future infringements and
misappropriations thereof, (iv) all income, royalties, damages and other

 3
 

 

payments now and hereafter due and/or payable with
respect thereto (including, without limitation, payments under all Copyright
Licenses entered into in connection therewith, and damages and payments for past,
present or future infringements thereof), and (v) all other rights of any kind
whatsoever accruing thereunder or pertaining thereto.

“Deposit
Account”:  as defined in the UCC and,
in any event, including, without limitation, any demand, time, savings,
passbook or like account maintained with a depositary institution.

“Discharge”:  the satisfaction and discharge (pursuant to
Article 13 of the Indenture), defeasance (pursuant to Article 9 of the
Indenture) or other satisfaction in full of the Secured Obligations.

“Escrow
Account”:  the account into which
FiberTower will have deposited on the date of the Indenture, pursuant to the
Escrow Agreement, U.S. Government Securities and/or cash in an amount
sufficient for FiberTower to fully pay the initial four interest payments on
the Notes.

“Escrow
Agreement”:  the Escrow Agreement
dated as of the date of the Indenture by and among FiberTower, the Trustee and
Wells Fargo, as escrow agent thereunder, as such agreement may be amended,
modified or supplemented from time to time, in accordance with its terms and
the terms of the Indenture.

“Event
of Default”:  any Event of Default
under and as defined in the Indenture.

“Excluded
Assets”:  (1) any lease, license,
permit, franchise, power, authority or right if, to the extent that and for
long as (a) the grant of a security interest therein validly constitutes or
would result in the abandonment, invalidation or unenforceability of such
lease, license, permit, franchise, power, authority or right or the termination
or default under the instrument or agreement by which such lease, license,
permit, franchise, power, authority or right is governed and (b) such
abandonment, invalidation, unenforceability, breach, termination or default is
not rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of
the UCC (or any successor provision) of any relevant jurisdiction or other
applicable law (including the Bankruptcy Code) or principles of equity; provided, however, that (x) such lease, license, permit,
franchise, power, authority or right will be an Excluded Asset only to the
extent and for as long as the conditions set forth in clauses (a) and (b) of
this paragraph are and remain satisfied, and to the extent such assets
otherwise constitute Collateral, such assets will cease to be Excluded Assets
and will become subject to the first priority security interest of the
Collateral Agent for the benefit of the Noteholders and of the Pari Passu
Collateral Agent for the benefit of the holders of any Pari Passu Obligations,
immediately and automatically at such time as such conditions cease to exist,
including by reason of any waiver or consent under the applicable instrument or
agreement, and (y) the proceeds of any sale, lease or other disposition of any
such lease, license, permit, franchise, power, authority or right that is or
becomes an Excluded Asset shall not be an Excluded Asset and shall at all times
be and remain subject to the first priority security interest of the Collateral
Agent for the benefit of the Noteholders and of the Pari Passu Collateral Agent
for the benefit of the holders of any Pari Passu Obligations, (2) property
securing Capital Lease Obligations, mortgage financings or purchase money
obligations and

 4
 

 

Indebtedness secured by Liens existing as of the date
of this Agreement in favor of Mitsui & Co., (U.S.A.), Inc. and Mitsui &
Co., Ltd. pursuant to those certain Master Installment Sale and Security
Agreements, each dated as of April 2, 2004 permitted to be incurred under the
Indenture to the extent the documents governing such Indebtedness prohibit the
granting of a security interest in the assets securing such Indebtedness, (3)
non-material real property, (4) leased real property, (5) any instrument
evidencing Indebtedness owed to FiberTower or any of the Guarantors to the
extent that (a) the existence and amount of such instrument is disclosed in the
Final Offering Memorandum or (b) such instrument is created following the date
of this Agreement in a transaction that complies with the Indenture, and (6)
amounts in the Escrow Account.

“Excluded
Collateral”: as defined in Section 2.2.

“FiberTower”:  as defined in the preamble to this Agreement.

“Final
Offering Memorandum” means the offering memorandum of the Company, dated
October 25, 2006, relating to the offering of the Initial Notes.

“FNS”:  as defined in the preamble to this Agreement.

“GAAP”:  generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.

“General
Intangibles”:  all “general
intangibles” as such term is defined in Section 9-102(a)(42) of the UCC in
effect on the date hereof and all of the following regardless of how classified
under the UCC and regardless of whether subject thereto:  with respect to any Grantor, all rights and
interests in, to and under contracts, agreements, instruments and indentures,
and all licenses, permits, concessions, franchises and authorizations issued by
Governmental Authorities in any form, and portions thereof, to which such
Grantor is a party or under which such Grantor has any right, title or interest
or to which such Grantor or any property of such Grantor is subject, as the
same may from time to time be amended, amended and restated, supplemented, replaced
or otherwise modified, including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of such Grantor to receive proceeds
of any insurance, indemnity, warranty or guaranty with respect thereto, (iii)
all rights of such Grantor to receive any tax refunds, (iv) all claims of such
Grantor for damages arising out of or for breach of or default thereunder, (v)
all rights of such Grantor to terminate, amend, supplement, modify or waive
performance thereunder, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder, (vi) all rights of such Grantor
under each such contract or agreement to make determinations, to exercise any
election (including the election of remedies) or option or to give or receive
any notice, consent, waiver, or approval, together with full power and
authority with respect to any contract or agreement to demand, receive,
enforce, collect or provide receipt for any of the foregoing rights or any
property that is subject of any of the contracts or agreements, to enforce or
execute any checks, or other instruments or orders, to file

 5
 

 

any claims and to take any action which may be
necessary or advisable in connection with any of the foregoing.

“Governmental
Authority”:  any national, state or
local government (whether domestic or foreign), any political subdivision
thereof or any other governmental, quasi-governmental, judicial, public or
statutory instrumentality, authority, body, agency, bureau or entity, or any
other entity exercising executive, legislative, judicial regulatory or
administrative functions of or 
pertaining to government or any arbitrator with authority to bind a
party at law.

“Grantor”:  as defined in the preamble to this Agreement.

“Indenture”:  as defined in the recitals to this Agreement.

“Intellectual
Property”:  the collective reference
to all rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark
Licenses, the Trade Secrets and the Trade Secret Licenses, and all rights to
sue at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.

“Intercompany
Note”:  any promissory note
evidencing loans made by any Grantor to any other Grantor.

“Intercreditor
Agreement”: as defined in the recitals to this Agreement.

“Investment
Property”:  the collective reference
to (i) all “investment property” as such term is defined in Section
9-102(a)(49) of the UCC in effect on the date hereof including, without
limitation, all Certificated Securities and Uncertificated Securities, all
Security Entitlements, all Securities Accounts, all Commodity Contracts and all
Commodity Accounts, (ii) in the case of any United States Treasury book-entry
securities, security entitlements as defined in 31 C.F.R. section 357.2, or, in
the case of any United States federal agency book-entry securities, security
entitlements as defined in the corresponding United States federal regulations
governing such book-entry securities, and (iii) whether or not constituting “investment
property” as defined in the UCC in effect on the date hereof, all Pledged
Notes, all Pledged Stock, all Pledged Security Entitlements, all Pledged Debt
Securities and all Pledged Commodity Contracts.

“Issuers”:
the collective reference to each issuer of a Pledged Security.

“Legal
Requirement”:  all laws, statutes,
orders, decrees, injunctions, licenses, permits, approvals, agreements and
regulations of any Governmental Authority having jurisdiction over the matter
in question.

“Lien”:  with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a

 6
 

 

security interest in and any filing of or agreement to
give any financing statement under the UCC (or equivalent statutes) of any
jurisdiction.

“Non-Deliverable
Collateral”:  as defined in Section
3.7.

“Note
Guarantee”:  as defined in the
recitals to this Agreement.

“Noteholders”:  means the “Holders” as defined in the
Indenture.

“Notes”:  as defined in the recitals to this Agreement.

“Pari Passu Collateral Agent”:  at any time, the Person serving at such time
as the “Collateral Agent” under the agreement governing any Pari Passu
Indebtedness or any other representative then most recently designated in
accordance with the applicable provisions of any such agreement, together with
its successors in such capacity.

“Pari Passu Indebtedness”:  as defined in the Intercreditor Agreement.

“Pari
Passu Obligations”:  the Pari Passu
Indebtedness and all other Obligations in respect of Pari Passu Indebtedness.

“Patent
License”:  all agreements, whether
written or oral, providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a Patent,
including, without limitation, any of the foregoing referred to in Schedule 5.

“Patents”:  (i) all patents, patent applications and
patentable inventions, including, without limitation, each issued patent and
patent application identified in Schedule 5, and all certificates
of invention or similar industrial property rights, (ii) all inventions and
improvements described and claimed therein, (iii) the right to sue or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (iv) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all Patent Licenses entered into in
connection therewith, and damages and payments for past, present or future
infringement thereof), and (v) all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals, and extensions thereof, all
improvements thereon and all other rights of any kind whatsoever accruing
thereunder or pertaining thereto.

“Permits”:  any and all franchises, licenses, leases,
permits, approvals, notifications, certifications, registrations,
authorizations, exemptions, qualifications, easements, rights of way, Liens and
other rights, privileges and approvals required under any Legal Requirement.

“Permitted
Liens:  as defined in the Indenture.

“Person”:  any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization, limited liability company or government or other entity.

 7
 

 

“Pledged
Commodity Contracts”:  all commodity
contracts listed on Schedule 1 and all other commodity contracts to
which any Grantor is party from time to time.

“Pledged
Debt Securities”:  the debt
securities listed on Schedule 1, together with any other certificates,
options, rights or security entitlements of any nature whatsoever in respect of
the debt securities of any Person that may be issued or granted to, or held by,
any Grantor while this Agreement is in effect.

“Pledged
Notes”:  all promissory notes listed
on Schedule 1, all Intercompany Notes at any time issued to any
Grantor and all other promissory notes issued to or held by any Grantor.

“Pledged
Securities”:  the collective
reference to the Pledged Debt Securities, the Pledged Notes and the Pledged
Stock.

“Pledged
Security Entitlements”:  all security
entitlements with respect to the financial assets listed on Schedule 1
and all other security entitlements of any Grantor.

“Pledged
Stock”:  the shares of Capital Stock
listed on Schedule 1, together with any other shares, stock or
membership certificates, options, rights or security entitlements of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or
granted to, or held by, any Grantor while this Agreement is in effect,
including the Capital Stock of each Guarantor.

“Proceeds”:  all “proceeds” as such term is defined in
Section 9-102(a)(64) of the UCC in effect on the date hereof and, in any
event, shall include, without limitation, all dividends or other income from
the Pledged Securities, collections thereon or distributions or payments with
respect thereto.

“Receivable”:  any right to payment for goods or other
property sold, leased, licensed or otherwise disposed of or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account or Payment Intangible). 
References herein to a Receivable shall include any Supporting
Obligation or collateral securing such Receivable.

“Released
Assets”:  at any time, any Collateral
that is permitted to be released at such time and is in fact released from the
Lien of the Collateral Agent securing the Secured Obligations by the terms of
the Indenture.

“Secured
Obligations”: all Obligations of the Grantors to or for the benefit of the
Trustee, the Collateral Agent or the Noteholders under the Indenture, the
Notes, the Additional Notes, the Collateral Agreements and any other agreement,
document or instrument entered into or delivered by any Grantor on, prior to,
or after the Closing Date with or to or for the benefit of the Trustee, the
Collateral Agent or the Noteholders.

“Secured
Parties”:  individually and
collectively, the Noteholders and the Collateral Agent.

 8
 

 

“Securities
Act”:  the Securities Act of 1933, as
amended.

“Solutions”:  as defined in the preamble to this Agreement.

“Teligent”:  as defined in the preamble to this Agreement.

“Trademark
License”:  any agreement, whether
written or oral, providing for the grant by or to any Grantor of any right to
use any Trademark, including, without limitation, any of the foregoing referred
to in Schedule 5.

“Trademarks”:  (i) all trademarks, service marks, trade
names, corporate names, company names, business names, trade dress, trade
styles, logos, or other indicia of origin or source identification, internet
domain names, trademark and service mark registrations, and applications for
trademark or service mark registrations and any renewals thereof, including, without
limitation, each registration and application identified in Schedule 5,
(ii) the right to sue or otherwise recover for any and all past, present and
future infringements and misappropriations thereof, (iii) all income,
royalties, damages and other payments now and hereafter due and/or payable with
respect thereto (including, without limitation, payments under all Trademark
Licenses entered into in connection therewith, and damages and payments for
past, present or future infringements thereof), and (iv) all other rights of
any kind whatsoever accruing thereunder or pertaining thereto, together in each
case with the goodwill of the business connected with the use of, and
symbolized by, each of the above.

“Trade
Secret License”:  any agreement,
whether written or oral, providing for the grant by or to any Grantor of any
right to use any Trade Secret, including, without limitation, any of the
foregoing referred to in Schedule 5.

“Trade
Secrets”:  (i) all trade secrets and
all confidential and proprietary information, including know-how, manufacturing
and production processes and techniques, inventions, research and development
information, technical data, financial, marketing and business data, pricing
and cost information, business and marketing plans, and customer and supplier
lists and information, including, without limitation, any of the foregoing
referred to in Schedule 5, (ii) the right to sue or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (iii) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past, present or future infringements
thereof), and (iv) all other rights of any kind whatsoever of any Grantor
accruing thereunder or pertaining thereto.

“Trustee”:  Wells Fargo Bank, National Association, until
a successor replaces it in accordance with the applicable provisions of the
Indenture and thereafter means the successor serving thereunder.

“UCC”:  the Uniform Commercial Code as in effect from
time to time in the State of New York or, when the context implies, the Uniform
Commercial Code as in effect from time to time in any other applicable
jurisdiction.

 9

 

“Vehicles”:  all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of title law
of any jurisdiction and all tires and other appurtenances to any of the
foregoing; provided, that as of any date of determination, this
definition will exclude any vehicles with a value of less than $50,000
individually (the “Excluded Vehicles”); provided, further, that
as of any date of determination, the value of the Excluded Vehicles cannot
exceed $500,000 in the aggregate.

“Working
Capital Facility”:  one or more debt
facilities, up to an aggregate principal amount of $50.0 million, with banks or
other institutional lenders providing for revolving credit loans, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced (whether upon or after termination or
otherwise) or refinanced (including by means of sales of debt securities to
institutional investors) in whole or in part from time to time.

1.2           Other Definitional Provisions.

(a)           The words “hereof”, “herein”, “hereto”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement
unless otherwise specified.

(b)           The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.

(c)           Where the context requires, terms
relating to the Collateral or any part thereof, when used in relation to a
Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

SECTION 2.  GRANT
OF SECURITY INTEREST

2.1           Grant of Security Interest by
Grantors.  Each Grantor hereby grants
to the Collateral Agent a security interest in all of the personal property of
such Grantor, including, without limitation, the following property, in each
case, wherever located and now owned or at any time hereafter acquired by such
Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Collateral”),
as collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the
Secured Obligations:

(a)           all Accounts;

(b)           all Chattel Paper;

(c)           all Commercial Tort Claims;

(d)           all Deposit Accounts, all funds held
therein and all certificates and instruments, if any, from time to time
representing or evidencing such Deposit Accounts;

 10
 

 

(e)           all Documents;

(f)            all Equipment;

(g)           all General Intangibles (including,
without limitation, Payment Intangibles and Intellectual Property);

(h)           all Instruments;

(i)            all Inventory;

(j)            all Investment Property;

(k)           all Letters of Credit and Letter of
Credit Rights;

(l)            all Money;

(m)          all Vehicles;

(n)           all Goods and other property not
otherwise described above;

(o)           any and all Capital Stock of any
Person, including, without limitation, the certificates representing such
interest(s) and (i) such Grantor’s share of all rights to receive income, gain,
profit, loss or other items allocated or distributed to it under such Person’s
by-laws or operating agreement; (ii) all rights to receive all income, profit
or other distributions of any nature whatsoever by such Grantor with respect to
such interest(s); (iii) all of such Grantor’s capital or ownership interest,
including capital accounts, in such Person; (iv) all of such Grantor’s voting
rights or rights to control or direct the affairs of such Person; (v) all of
such Grantor’s right, title and interest in such Person or in or to any of such
Person’s assets or properties; (vi) all other right, title and interest in or
to such Person as such rights are derived from such Grantor’s equity interest
in such Person; (vii) all claims of such Grantor for damages arising out of a
breach of or a default relating to the property described in this paragraph;
(viii) all rights of such Grantor to terminate, amend, modify, supplement
or waive performance under such Person’s by-laws or operating agreement, to
perform thereunder and to compel performance and otherwise exercise the
remedies thereunder; and (ix) all of the proceeds of any and all of the
foregoing;

(p)           all books, records, ledger cards,
files, correspondence, customer lists, blueprints, technical specifications,
manuals, computer software, computer printouts, tapes, disks and other
electronic storage media and related data processing software and similar items
that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection thereof or
realization thereupon; and

(q)           all Permits, to the extent permitted
by applicable law (it being recognized that, as of the date hereof, applicable
law does not permit the grant of a security interest in an FCC License);

 11
 

 

(r)            the proceeds of all of the foregoing
collateral, whether cash or non-cash, including (i) all rights of such Grantor
to receive moneys due and to become due under or pursuant to the Collateral,
(ii) all rights of such Grantor to receive return of any premiums for or
proceeds of any insurance, indemnity, warranty or guaranty with respect to the
Collateral or to receive condemnation proceeds, (iii) all claims of such
Grantor for damages arising out of or for breach of or default under any
Collateral, (iv) all rights of such Grantor to payment for goods or other
property sold or leased or services performed by such Grantor, (v) to the
extent not included in the foregoing, all proceeds receivable or received when
any and all of the foregoing Collateral is sold, collected, exchanged or
otherwise disposed of, whether voluntarily or involuntarily, and (vi) any and
all additions and accessions to the Collateral, and all proceeds thereof,
including proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims, including all awards, all insurance
proceeds, including any unearned premiums or refunds of premiums on any
insurance policies covering all or any part of the Collateral and the right to
receive and apply the proceeds of any insurance, or of any judgments or settlements
made in lieu thereof for damage to or diminution of the Collateral.

2.2           Limitations to Collateral.  Notwithstanding anything to the contrary in
this Agreement, the term “Collateral” shall not include (i) any of the Excluded
Assets or (ii) any of the Released Assets (collectively, the “Excluded
Collateral”).

2.3           Intercreditor Agreement.  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 shall be subject to the provisions of the
Intercreditor Agreement (to the extent the Intercreditor Agreement has been
entered into in accordance with the Indenture and otherwise has not been
terminated in accordance with its terms). 
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.  Notwithstanding
anything herein to the contrary, as long as any obligations remain outstanding
under the Working Capital Facility, the requirements under this Agreement to
deliver Collateral to the Collateral Agent or register the Collateral Agent as
the registered owner of any Collateral shall be deemed satisfied by delivery of
such Collateral to, or the registration of such Collateral in the name of, the
Working Capital Facility Collateral Agent.

SECTION 3.  REPRESENTATIONS
AND WARRANTIES

To induce the Trustee, on behalf of the Noteholders,
to enter into the Indenture and the Noteholders to purchase the Notes, each
Grantor hereby represents and warrants to the Secured Parties, that:

3.1           Title; No Other Liens.  Such Grantor owns each item of the Collateral
purported to be owned by it free and clear of any and all Liens or claims,
including, without limitation, Liens arising as a result of such Grantor
becoming bound (as a result of merger or otherwise) as Grantor under a security
agreement entered into by another Person, in each case except for Permitted
Liens.  No effective financing statement,
mortgage or other instrument similar in effect with respect to all or any part
of the Collateral is on file or of record in any public office, except such as
have been filed in favor of the Collateral Agent pursuant to this Agreement or
with respect to Permitted Liens.

 12
 

 

3.2           Perfected First Priority Liens.

(a)           The security interests granted
pursuant to this Agreement (i) constitute valid and, subject only to (x) with
respect to any Collateral that solely can be perfected by filing, to the extent
Article 9 of the UCC applies thereto, the filing of financing statements in the
filing offices identified on Schedule 2 hereto and (y) with respect
to any Collateral that can be perfected by possession, the Collateral Agent
receiving possession thereto, fully perfected security interests in all of the
Collateral, in favor of the Collateral Agent, as collateral security for the
Secured Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor, (ii) are subject to no other Liens on the
Collateral, except for Permitted Liens, and (iii) are prior to all other
Liens on the Collateral, except for (x) the Permitted Liens described in
clauses (3), (11) and (12) of the definition of “Permitted Liens” set forth in
the Indenture, with respect to the Collateral described in clause (i)(x) above
and (y) for the Permitted Liens described in clauses (3), (11) and (12) (and,
to the extent required by law, clauses (8) and (9)) of the definition of “Permitted
Liens” set forth in the Indenture, with respect to the Collateral described in
clause (i)(y) above.  Without limiting
the foregoing, each Grantor has taken all actions necessary, including, without
limitation, those specified in Section 4.1 (but subject in all cases to Section
2.3), to:  (A) establish the Collateral
Agent’s “control” (within the meanings of Sections 8-106 and 9-106 of the UCC)
over any portion of the Investment Property constituting Certificated
Securities, Uncertificated Securities, Securities Accounts, Securities
Entitlements or Commodity Accounts (each as defined in the UCC) and (B)
establish the Collateral Agent’s “control” (within the meaning of Section 9-104
of the UCC) over all Deposit Accounts.

(b)           No authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority or
regulatory body (except those which have been made or obtained) is required for
either (i) the pledge or grant by any Grantor of the security interests
purported to be created in favor of the Collateral Agent hereunder or (ii) the
exercise by the Collateral Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created hereunder or created or
provided for by applicable law), except (A) filings and actions specified on Schedule 2
and (B) as may be required, in connection with the disposition of any
Investment Property, by laws generally affecting the offering and sale of
securities.

(c)           All obligations, indebtedness and
liabilities of each Grantor to Banc One pursuant to the Banc One Purchase
Agreements have been terminated and satisfied in full, and the Banc One
Purchase Agreements are of no further force and effect.

3.3           Name; Jurisdiction of
Organization, etc.  Such Grantor’s
exact legal name (as indicated on the public record of such Grantor’s
jurisdiction of formation or organization), jurisdiction of organization and
the location of such Grantor’s chief executive office or sole place of business
are specified on Schedule 3. 
Each Grantor is organized solely under the law of the jurisdiction so
specified and has not filed any certificates of domestication, transfer or
continuance in any other jurisdiction. 
Except as otherwise indicated on Schedule 3, the
jurisdiction of each such Grantor’s organization or formation is required to
maintain a public record showing the Grantor to have been organized or
formed.  Except as specified on Schedule 3,
such Grantor has not changed its name, jurisdiction of organization or
formation, chief executive office or sole place of business or its corporate
structure in any way (e.g. by merger, consolidation, change in corporate form
or otherwise) within the previous five (5) year

 13
 

 

period ending on the date hereof, solely in the case
of each Grantor and has not within such period become bound (whether as a
result of merger or otherwise) as grantor under a security agreement entered
into by another Person, which has not heretofore been terminated.

3.4           Inventory, Equipment and Books and
Records.  The Inventory and the
Equipment (other than mobile goods) and the books and records pertaining to the
Collateral are kept at the locations listed on Schedule 4.  No material Inventory or Equipment (in the
aggregate) of such Grantor is in the possession of an issuer of a negotiable
document (as determined in accordance with Section 7-104 of the UCC) therefor
that has not been delivered to the Collateral Agent or is otherwise in the
possession of any bailee or warehouseman.

3.5           Farm Products.  None of the Collateral constitutes, or is the
Proceeds of, Farm Products.

3.6           Investment Property.

(a)           The shares of Pledged Stock pledged
by such Grantor hereunder constitute all of the issued and outstanding shares
of all classes of the Capital Stock of each Issuer owned by such Grantor.

(b)           All the shares of the Pledged Stock
of such Grantor have been duly and validly issued and are fully paid and
nonassessable.

(c)           Each limited liability company or
member’s interest or partnership interest owned by such Grantor and included in
the Pledged Stock is certificated (and each Grantor covenants that it will not
issue or cause or permit its Subsidiaries to issue any Capital Stock in
uncertificated form or seek to convert all or any part of its existing Capital
Stock into uncertificated form) and the terms of such certificated limited
liability company or member’s interests and partnership interests expressly
provide that they are securities governed by Article 8 of the Uniform
Commercial Code in effect from time to time in the applicable jurisdiction.

(d)           Such Grantor is the record and
beneficial owner of, and has good and marketable title to, the Investment
Property pledged by it hereunder, free of any and all Liens or options in favor
of, or claims of, any other Person, except Permitted Liens.

(e)           Each Issuer that is not a Grantor but
is an Affiliate of any Grantor has executed and delivered to the Collateral
Agent an Acknowledgment and Agreement, in substantially the form of Exhibit
A, to the pledge of the Pledged Securities pursuant to this Agreement.

3.7           Receivables.

No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Collateral Agent (other than Receivables
evidenced by Instruments in an aggregate amount less than $25,000 per Grantor
(collectively, the “Non-Deliverable Collateral”)).

 14
 

 

3.8           Intellectual Property.

As of the date hereof, Schedule 5
includes, without limitation, a list of all Intellectual Property owned by such
Grantor in its own name on the date hereof. 
As of the date hereof, except as set forth in Schedule 5,
such Grantor is the exclusive owner of the entire and unencumbered right, title
and interest in and to such Intellectual Property and is otherwise entitled to
use all such Intellectual Property, without limitation.

3.9           Vehicles.  Schedule 6
sets forth a complete and correct list of all Vehicles owned by such Grantor on
the date hereof.

3.10         Commercial Tort Claims.

(a)           On the date hereof, no Grantor has
rights in any Commercial Tort Claim with reasonably expected value in excess of
$500,000.

(b)           Upon the filing of a financing
statement covering any Commercial Tort Claim referred to in Section 4.8 hereof
against such Grantor in the jurisdiction specified in Schedule 2 hereto, the
security interest granted in such Commercial Tort Claim will constitute a valid
perfected security interest in favor of the Collateral Agent, for the benefit
of the Secured Parties, as collateral security for such Grantor’s Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase such Collateral except for
unrecorded liens permitted herein which have priority over the Liens on such
Collateral by operation of law.

SECTION 4.  COVENANTS

Each Grantor covenants and agrees with the Secured
Parties that, from and after the date of this Agreement until the Secured
Obligations (other than unmatured contingent reimbursement and indemnification
Obligations) shall have been Discharged:

4.1           Delivery and Control of
Instruments, Chattel Paper, Investment Property and Deposit Accounts.

(a)           If any of the Collateral (other than
the Non-Deliverable Collateral) shall be or become evidenced or represented by
any Instrument, Certificated Security or Chattel Paper, such Grantor shall
cause such Instrument, Certificated Security or Chattel Paper to be promptly
delivered to the Collateral Agent and duly endorsed in a manner satisfactory to
the Collateral Agent, to be held as Collateral pursuant to this Agreement.

(b)           If any of the Collateral shall be or
become evidenced or represented by an Uncertificated Security, such Grantor
shall cause, or with respect to any Issuer that is not an Affiliate of any
Grantor, use commercially reasonable efforts to cause, such Issuer thereof
either (i) to register the Collateral Agent as the registered owner of such
Uncertificated Security, upon original issue or registration of transfer, or
(ii) to agree in writing with such Grantor and the Collateral Agent that such
Issuer will comply with instructions with respect to such Uncertificated
Security originated by the Collateral Agent without further consent of such
Grantor, such agreement to be in substantially the form of Exhibit C. 
Notwithstanding the

 15
 

 

foregoing, each Grantor covenants that (x) the
representations and warranties applicable to each Grantor and contained in
Section 3.6(c) shall at all times be true and correct, and (y) it will not
issue or cause or permit its Subsidiaries to issue any Capital Stock in
uncertificated form or seek to convert all or any part of its existing Capital
Stock into uncertificated form.

(c)           If any of the Collateral now or
hereafter constitutes a Deposit Account or a Securities Account, such Grantor
shall cause the financial institution maintaining such account to agree in
writing with such Grantor and the Collateral Agent that such financial
institution shall comply with all Entitlement Orders and instructions
originated or issued by the Collateral Agent with respect to such Deposit
Account or Securities Account without further consent of such Grantor, such
agreement to be substantially in the form of Exhibit D
or in such other form as shall be satisfactory to the Collateral Agent.

(d)           If any of the Collateral shall be or
become evidenced or represented by a Commodity Contract, such Grantor shall
cause the Commodity Intermediary with respect to such Commodity Contract to
agree in writing with such Grantor and the Collateral Agent that such Commodity
Intermediary will apply any value distributed on account of such Commodity
Contract as directed by the Collateral Agent without further consent of such
Grantor, such agreement to be in substantially the form of Exhibit E or in such other form as may be
satisfactory to the Collateral Agent.

(e)           If any of the Collateral shall be or
become evidenced or represented by or held in a Securities Account or a
Commodity Account, such Grantor shall, in the case of a Securities Account,
comply with Section 4.1(c) with respect to all Security Entitlements carried in
such Securities Account and, in the case of a Commodity Account, comply with
Section 4.1(d) with respect to all Commodity Contracts carried in such
Commodity Account.

(f)            Each Grantor agrees to use
commercially reasonable efforts to cause each issuer of a letter of credit in
an amount in excess of $1,000,000 under which such Grantor has Letter-of-Credit
Rights to consent to an assignment of proceeds thereof or otherwise grant
control within the meaning of Section 9-107 of the UCC over the related Letter-of-Credit
Rights to the Collateral Agent.

(g)           (i) Grantors, on a combined basis,
shall not accumulate or maintain cash in the Deposit Accounts maintained at
Merrill Lynch Pierce Fenner & Smith, Inc. in an aggregate amount in excess
of $10,000,000 and (ii) the Grantors shall deliver to the Collateral Agent, in
form and substance satisfactory to the Collateral Agent, by December 15, 2006
(or by such later date as may be consented to in writing by the Collateral
Agent in its sole discretion), evidence that the Deposit Accounts of FNS
maintained at Merrill Lynch Pierce Fenner & Smith, Inc. have been closed
and replaced with Deposit Accounts maintained at a financial institution
acceptable to the Collateral Agent with respect to which the Collateral Agent
has obtained a control agreement substantially in the form of Exhibit D or in such other form as shall be
satisfactory to the Collateral Agent, duly authorized, executed and delivered
by FNS and the new financial institution. 
Failure to comply with this Section
4.1(g) shall constitute an immediate Event of Default.

 16
 

 

4.2           Maintenance of Perfected Security
Interest; Further Documentation.

(a)           Such Grantor shall maintain the
security interest created by this Agreement as a perfected security interest
having at least the priority described in Section 3.2 and shall defend such
security interest against the claims and demands of all Persons whomsoever
other than holders of Permitted Liens described in Section 3.2(a)(iii).

(b)           At any time and from time to time,
upon the written request of the Collateral Agent, and at the sole expense of
such Grantor, such Grantor will promptly and duly authorize, execute and
deliver, and have recorded, such further instruments and documents and take
such further actions as the Trustee or the Collateral Agent may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, (i) the filing of any financing or continuation statements under
the Uniform Commercial Code (or other similar laws) in effect in any
jurisdiction with respect to the security interests created hereby and (ii) in
the case of Investment Property, Deposit Accounts and any other relevant
Collateral, taking any actions necessary to enable the Collateral Agent to
obtain “control” (within the meaning of the applicable Uniform Commercial Code)
with respect thereto, including without limitation, executing and delivering
and causing the relevant depositary bank or securities intermediary to execute
and deliver a Control Agreement in the form attached hereto as Exhibit D,
or in such other form as may be satisfactory to the Collateral Agent.

4.3           Changes in Locations, Name,
Jurisdiction of Incorporation, etc. 
Such Grantor will not, except upon fifteen (15) days’ prior written
notice to the Collateral Agent and delivery to the Collateral Agent of (a) all
additional financing statements and other documents reasonably requested by the
Collateral Agent to maintain the validity, perfection and priority of the
security interests provided for herein, (b) if applicable, a written supplement
to Schedule 3 showing any changes to such Grantor’s exact legal
name (as indicated on the public record of such Grantor’s jurisdiction of
formation or organization), jurisdiction of organization and the location of
such Grantor’s chief executive office or sole place of business, (c) any other
further instruments and documents pursuant to Section 4.2(b) and (d) if
applicable, a written supplement to Schedule 4 showing any
additional location at which Inventory or Equipment (other than mobile goods)
or books and records pertaining to the Collateral shall be kept:

(i)            permit any of the Inventory or
Equipment (other than mobile goods) or books and records pertaining to the
Collateral to be kept at a location other than those listed on Schedule 4;

(ii)           without limiting the prohibitions on
mergers involving the Grantors contained in the Indenture, change its legal
name, jurisdiction of organization or the location of its chief executive
office or sole place of business from that referred to on Schedule 3;
or

(iii)          change its identity or structure to
such an extent that any financing statement filed by the Collateral Agent in
connection with this Agreement would become misleading.

 17

 

4.4           Investment Property.

(a)           If such Grantor shall become entitled
to receive or shall receive any stock or other ownership certificate
(including, without limitation, any certificate representing a stock dividend
or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the Capital Stock of any
Issuer, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any shares of or other ownership interests in the Pledged Stock,
or otherwise in respect thereof, such Grantor shall accept the same as the
agent of the Secured Parties, hold the same in trust for the Secured Parties
and deliver the same forthwith to the Collateral Agent in the exact form
received, duly endorsed by such Grantor to the Collateral Agent, if required,
together with an undated stock power covering such certificate duly executed in
blank by such Grantor and with, if the Collateral Agent so requests, signature
guaranteed, to be held by the Collateral Agent, subject to the terms hereof, as
additional collateral security for the Secured Obligations.

(b)           Each Grantor agrees that (i) it will
be bound by the terms of this Agreement relating to the Pledged Securities
issued by it and will comply with such terms insofar as such terms are
applicable to it and (ii) the terms of Sections 5.3(c) and 5.7 shall apply to
it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 5.3(c) or 5.7 with
respect to the Pledged Securities issued by it. 
In addition, each Grantor hereby consents to the grant by each other
Grantor of the security interest hereunder in favor of the Collateral Agent and
to the transfer of any Pledged Security to the Collateral Agent or its nominee
following an Event of Default and to the substitution of the Collateral Agent
or its nominee as a partner, member or shareholder of the Issuer of the related
Pledged Security.

4.5           Intellectual Property.

(a)           Upon request of the Collateral Agent,
such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Collateral Agent may
request to evidence the Collateral Agent’s security interest, on behalf of the
Secured Parties, in any Copyright, Patent, Trademark or other Intellectual
Property included in the Collateral and the goodwill and general intangibles of
such Grantor relating thereto or represented thereby.

(b)           Such Grantor agrees that, should it
obtain an ownership interest in any item of Intellectual Property which is not
now a part of the Collateral (the “After-Acquired Intellectual Property”),
(i) the provisions of Section 2 shall automatically apply thereto, (ii) any
such After-Acquired Intellectual Property, and in the case of trademarks, the
goodwill of the business connected therewith or symbolized thereby, shall
automatically become part of the Collateral, (iii) it shall give prompt written
notice thereof to the Collateral Agent in accordance herewith, and (iv) it
shall provide the Collateral Agent promptly (and, in any event within five (5)
Business Days after the last day of the fiscal quarter in which such Grantor
acquires such ownership interest in any Intellectual Property) with an amended Schedule 5
and take the actions specified in Section 4.5(d).

(c)           Such Grantor agrees to execute an
Intellectual Property Security Agreement with respect to its Intellectual
Property in substantially the form of Exhibit B-1 in

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order to record the security interest granted herein
to the Collateral Agent for the benefit of the Secured Parties with the United
States Patent and Trademark Office, the United States Copyright Office, and any
other applicable Governmental Authority.

(d)           Promptly after filing an application
for the registration of any After-Acquired Intellectual Property with the
United States Patent and Trademark Office, the United States Copyright Office,
or any similar office or agency in any other county or any political
subdivision thereof, such Grantor agrees to execute an After-Acquired
Intellectual Property Security Agreement with respect to such After-Acquired
Intellectual Property in substantially the form of Exhibit B-2 in
order to record the security interest granted herein to the Collateral Agent
for the benefit of the Secured Parties with the United States Patent and
Trademark Office, the United States Copyright Office, or other Governmental
Authority (as applicable).

4.6           Non-Deliverable Collateral.  At no time shall any item of Non-Deliverable
Collateral be delivered to or held by any Person (other than the Collateral
Agent) as collateral security for any obligation of any Grantor.

4.7           Vehicles.

(a)           No Vehicle shall be removed from the
state which has issued the certificate of title or ownership therefor for a
period in excess of the period after which such Vehicle would be required to be
retitled under applicable state law.

(b)           With respect to any Vehicles acquired
by such Grantor subsequent to the date hereof, within thirty (30) days after
the date of acquisition thereof, all applications for certificates of title or
ownership indicating the Collateral Agent’s first priority security interest in
such Vehicle covered by such certificate, and any other necessary
documentation, shall be filed in each office in each jurisdiction which the
Collateral Agent shall deem advisable to perfect its security interests in such
Vehicles.

4.8           Commercial Tort Claims.  If such Grantor shall obtain an interest in
any Commercial Tort Claim with a reasonably expected value in excess of
$500,000, such Grantor shall within 30 days of obtaining such interest sign and
deliver documentation acceptable to the Collateral Agent granting a security
interest under the terms and provisions of this Agreement in and to such
Commercial Tort Claim.  Upon the filing
of a financing statement covering such Commercial Tort Claim against such
Grantor in the jurisdiction specified in Schedule 2 hereto, the security
interest granted in such Commercial Tort Claim will constitute a valid
perfected security interest in favor of the Collateral Agent, for the benefit
of the Secured Parties, as collateral security for such Grantor’s Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase such Collateral from Grantor,
which security interest shall be prior to all other Liens on such Collateral
except for unrecorded liens permitted herein which have priority over the Liens
on such Collateral by operation of law.

4.9           Termination of UCC Financing
Statements.  The Grantors shall
deliver to the Collateral Agent, in form and substance satisfactory to the
Collateral Agent, by December 22, 2006 (or by such later date as may be
consented to in writing by the Collateral Agent in its

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sole discretion), evidence that the UCC financing
statements set forth on Schedule 7 hereto have been terminated.  Failure
to comply with this Section 4.9(g) shall constitute an immediate Event
of Default.

SECTION 5.  REMEDIAL PROVISIONS

5.1           Certain Matters Relating to
Receivables.

(a)           The Collateral Agent hereby
authorizes each Grantor to collect such Grantor’s Receivables; provided,
that the Collateral Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default.  If required by the Collateral Agent at any
time after the occurrence and during the continuance of an Event of Default,
any payments of Receivables, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two (2) Business Days) deposited by such
Grantor in the exact form received, duly endorsed by such Grantor to the
Collateral Agent if required, in a Collateral Account maintained under the
control of the Collateral Agent, subject to withdrawal by the Collateral Agent
for the account of the Secured Parties only as provided in Section 5, and (ii)
until so turned over, shall be held by such Grantor in trust for the Secured
Parties, segregated from other funds of such Grantor.  Each such deposit of Proceeds of Receivables
shall be accompanied by a report identifying in reasonable detail the nature
and source of the payments included in the deposit.

(b)           At the Collateral Agent’s request,
after the occurrence and during the continuance of an Event of Default, each
Grantor shall deliver to the Collateral Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the Receivables (other than Non-Deliverable Collateral), including, without
limitation, all original orders, invoices and shipping receipts.

5.2           Communications with Obligors;
Grantors Remain Liable.

(a)           The Collateral Agent in its own name
or in the name of others may at any time after the occurrence and during the
continuance of an Event of Default (but not otherwise) communicate with
obligors under the Receivables to verify with them, to the Collateral Agent’s
satisfaction, the existence, amount and terms of any Receivables.

(b)           Upon the request of the Collateral
Agent at any time after the occurrence and during the continuance of an Event
of Default (but not otherwise), each Grantor shall notify obligors under the
Receivables that the Receivables have been assigned to the Collateral Agent for
the ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Collateral Agent or as the Collateral Agent shall
direct.

(c)           Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of the Receivables
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto.  No Secured Party
shall have any obligation or liability under any Receivable (or any agreement
giving rise thereto) by reason of or arising out of this Agreement or the
receipt by any Secured Party of any payment relating thereto, nor shall any
Secured Party be obligated in any manner to perform any of the obligations of
any Grantor under

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or pursuant to any Receivable (or any agreement giving
rise thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.

5.3           Pledged Securities.

(a)           Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice to
the relevant Grantor of the Collateral Agent’s intent to exercise its
corresponding rights pursuant to Section 5.3(b), each Grantor shall be
permitted to receive all cash dividends made in respect of the Pledged Stock
and all payments made in respect of the Pledged Notes, in each case to the
extent permitted in the Indenture, and to exercise all voting and corporate or
other ownership rights with respect to the Pledged Securities; provided,
however, that no vote shall be cast, and no corporate or other ownership
right shall be exercised or other action taken which would impair the
Collateral or which would be inconsistent with or result in any violation of
any provision of the Indenture, this Agreement or any other Note Document.

(b)           If an Event of Default shall occur
and be continuing and the Collateral Agent shall give notice of its intent to
exercise such rights to the relevant Grantor, (i) the Collateral Agent shall
have the right to receive any and all dividends, payments or other Proceeds
made in respect of the Pledged Securities and make application thereof to the
Obligations in the order set forth in Section 5.5, and (ii) any or all of the
Pledged Securities shall be registered in the name of the Collateral Agent or
its nominee, and the Collateral Agent or its nominee may thereafter exercise
(x) all voting, corporate or other ownership and other rights pertaining to
such Pledged Securities at any meeting of shareholders or other equity holders
of the relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
or other structure of any Issuer, or upon the exercise by any Grantor or the
Collateral Agent of any right, privilege or option pertaining to such Pledged
Securities, and in connection therewith, the right to deposit and deliver any
and all of the Pledged Securities with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
the Collateral Agent may determine), all without liability except to account
for property actually received by it, but the Collateral Agent shall have no duty
to any Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.

(c)           Each Grantor hereby authorizes and
instructs each Issuer of any Pledged Securities pledged by such Grantor hereunder
(i) to comply with any instruction received by it from the Collateral Agent in
writing that (x) states that an Event of Default has occurred and is continuing
and (y) is otherwise in accordance with the terms of this Agreement, without
any other or further instructions from such Grantor, and each Grantor agrees
that each Issuer shall be fully protected in so complying, and (ii) unless
otherwise expressly permitted hereby, to pay any

 21
 

 

dividends or other payments with respect to the
Pledged Securities directly to the Collateral Agent.

5.4           Proceeds to be Turned Over To
Collateral Agent.  In addition to the
other rights of the Secured Parties under this Section 5, with respect to
payments of Receivables, if an Event of Default shall occur and be continuing,
all Proceeds received by any Grantor consisting of cash, cash equivalents,
checks and other near-cash items shall be held by such Grantor in trust for the
Secured Parties, segregated from other funds of such Grantor, and shall
forthwith upon receipt by such Grantor, be turned over to the Collateral Agent
in the exact form received by such Grantor (duly endorsed by such Grantor to
the Collateral Agent, if required).  All
Proceeds received by the Collateral Agent hereunder shall be held by the
Collateral Agent in a Collateral Account maintained under its control.  All Proceeds while held by the Collateral
Agent in a Collateral Account (or by such Grantor in trust for the Secured
Parties) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 5.5.

5.5           Application of Proceeds.  Subject to the Intercreditor Agreement, if an
Event of Default shall have occurred and be continuing, the Collateral Agent
shall at the direction of the Trustee or Noteholders owning at least a majority
in aggregate principal amount of the Notes (including Additional Notes, if
any), exercise any remedies granted to the Trustee under Article 7 of the
Indenture and apply all or any part of Proceeds constituting Collateral
realized through the exercise by the Collateral Agent of its remedies
hereunder, whether or not held in any Collateral Account, in payment of the
Secured Obligations in the order set forth in Section 7.10 of the Indenture.

5.6           Code and Other Remedies.

(a)           If an Event of Default shall occur
and be continuing, the Collateral Agent, on behalf of the Secured Parties, may
exercise (subject to obtaining any required approvals from any Governmental
Authorities), in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
under the UCC (whether or not the UCC applies to the affected Collateral) or
any other applicable law or in equity. 
Without limiting the generality of the foregoing, the Collateral Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the Collateral,
or any part thereof, and/or may forthwith sell, lease, license, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit
risk.  Each Secured Party shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released to the fullest extent

 22
 

 

permitted by applicable law.  Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or hereafter
enacted.  Each Grantor agrees that, to
the extent notice of sale shall be required by law, at least ten (10) days
notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification.  The Collateral Agent shall
not be obligated to make any sale of the Collateral or any part thereof
regardless of notice of sale having been given. 
The Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.  The Collateral Agent may sell
the Collateral without giving any warranties as to the Collateral.  The Collateral Agent may specifically
disclaim or modify any warranties of title or the like.  This procedure will not be considered to
adversely effect the commercial reasonableness of any sale of the Collateral or
any part thereof.  Each Grantor agrees
that it would not be commercially unreasonable for the Collateral Agent to
dispose of the Collateral or any portion thereof by using Internet sites that
provide for the auction of assets of the types included in the Collateral or
that have the reasonable capability of doing so, or that match buyers and
sellers of assets.  Each Grantor hereby
waives any claims against the Collateral Agent or Trustee arising by reason of
the fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if the Collateral Agent accepts the first offer received and does
not offer such Collateral to more than one offeree.  Each Grantor further agrees, at the
Collateral Agent’s request, to assemble the Collateral or any part thereof and
make it available to the Collateral Agent at places which the Collateral Agent
shall reasonably select, whether at such Grantor’s premises or elsewhere.  The Collateral Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 5.6, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Secured Parties hereunder, including, without limitation, reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Secured
Obligations, in accordance with Section 7.10 of the Indenture, and only after
such application and after the payment by the Collateral Agent of any other
amount required by any provision of law, including, without limitation, Section
9-615(a) of the UCC, need the Collateral Agent account for the surplus, if any,
to any Grantor.  To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against any Secured Party arising out of the exercise by them of any
rights hereunder.

(b)           In the event of any disposition of
any of the Intellectual Property, the goodwill of the business connected with
and symbolized by any Trademarks subject to such disposition shall be included,
and the applicable Grantor shall supply the Collateral Agent or its designee
with such Grantor’s know-how and expertise, and with documents and things
embodying the same, relating to the manufacture, distribution, advertising and
sale of products or the provision of services relating to any Intellectual
Property subject to such disposition, and such Grantor’s customer lists and
other records and documents relating to such Intellectual Property and to the
manufacture, distribution, advertising and sale of such products and services.

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5.7           Registration Rights.

(a)           If the Collateral Agent shall
determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 5.6, and if in the opinion of the Collateral Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause, or with respect to any Issuer that is not an Affiliate of
any Grantor, use commercially reasonable efforts to cause, the Issuer thereof
to (i) execute and deliver, and cause the directors and officers of such Issuer
to execute and deliver, all such instruments and documents, and do or cause to
be done all such other acts as may be, in the opinion of the Collateral Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof
to be sold, under the provisions of the Securities Act, (ii) use its best
efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one (1) year from the date of
the first public offering of the Pledged Stock, or that portion thereof to be
sold, and (iii) make all amendments thereto and/or to the related prospectus
which, in the opinion of the Collateral Agent, are necessary or advisable, all
in conformity with the requirements of the Securities Act and the rules and regulations
of the SEC applicable thereto.  The
relevant Grantor agrees to cause, or with respect to any Issuer that is not an
Affiliate of any Grantor, use commercially reasonable efforts to cause, such
Issuer to comply with the provisions of the securities or “Blue Sky” laws of
any and all jurisdictions which the Collateral Agent shall designate and to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.

(b)           Each Grantor recognizes that the
Collateral Agent may be unable to effect a public sale of any or all of the
Pledged Stock or the Pledged Debt Securities, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner.  The Collateral Agent
shall be under no obligation to delay a sale of any of the Pledged Stock or the
Pledged Debt Securities for the period of time necessary to permit the Issuer
thereof to register such securities for public sale under the Securities Act,
or under applicable state securities laws, even if such Issuer would agree to
do so.

(c)           Each Grantor agrees to use its best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged Stock pursuant to
this Section 5.7 valid and binding and in compliance with any and all other
applicable Legal Requirements.  Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 5.7 will cause irreparable injury to the Secured Parties, that the
Secured Parties have no adequate remedy at law in respect of such breach and,
as a consequence, that each and every covenant contained in this Section 5.7
shall be specifically enforceable against such Grantor, and such Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred and is continuing or a defense of payment.

 24
 

 

5.8           Waiver; Deficiency.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
or any part thereof are insufficient to pay the Secured Obligations and the
fees and disbursements of any attorneys employed by any Secured Party to
collect such deficiency.

5.9           Exercise of Control.  Unless an Event of Default shall have
occurred and be continuing, the Collateral Agent agrees that it will not (nor
will it direct any agent acting as a trustee or other agent as secured party
pursuant to the Intercreditor Agreement or any Control Agreement to) deliver
any notice of control or otherwise exercise control or issue any entitlement
orders or instructions over any Account or any other deposit or securities
account of such Grantor subject to a Control Agreement.  Upon the cure or written waiver of such Event
of Default, the Collateral Agent will (or will direct any agent acting as a
trustee or other agent as secured party pursuant to the Intercreditor Agreement
or any Control Agreement to) deliver a revocation of such notice of control or
otherwise rescind control over, and hereby agrees to no longer issue any
entitlement orders or instructions with respect to, any Account or any other
deposit or securities account of such Grantor over which control was previously
exercised.

SECTION 6.  THE COLLATERAL AGENT

6.1           Collateral Agent’s Appointment as
Attorney-in-Fact, etc.

(a)           Each Grantor hereby irrevocably
constitutes and appoints the Collateral Agent and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of such Grantor and
in the name of such Grantor or in its own name, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Collateral Agent
the power and right, on behalf of such Grantor, without notice to or assent by
such Grantor to do any or all of the following:

(i)            in the name of such Grantor or in
its own name, or otherwise, take possession of and endorse and collect any
checks, drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Collateral Agent for the purpose
of collecting any and all such moneys due under any Receivable or with respect
to any other Collateral whenever payable;

(ii)           in the case of any Intellectual
Property, execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Collateral Agent may request to
evidence the Secured Parties’ security interest in such Intellectual Property
and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby;

 25

 

(iii)          pay or discharge taxes and Liens
levied or placed on or threatened against the Collateral, effect any repairs or
any insurance called for by the terms of this Agreement and pay all or any part
of the premiums therefor and the costs thereof;

(iv)          execute, in connection with any sale
provided for in Section 5.6 or 5.7, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral; and

(v)           (1) direct any party liable for any
payment under any of the Collateral to make payment of any and all moneys due
or to become due thereunder directly to the Collateral Agent or as the
Collateral Agent shall direct; (2) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral;
(3) sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral
or any portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; (6) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such discharges
or releases as the Collateral Agent may deem appropriate; (7) assign any
Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the world
for such term or terms, on such conditions, and in such manner, as the
Collateral Agent shall in its reasonable judgment determine; and (8) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Collateral
Agent were the absolute owner thereof for all purposes, and do, at the
Collateral Agent’s option and such Grantor’s expense, at any time, or from time
to time, all acts and things which the Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral and the Secured Parties’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.

Anything in this Section 6.1(a) to the contrary
notwithstanding, the Collateral Agent agrees that, except as provided in
Section 6.1(b), it will not exercise any rights under the power of attorney
provided for in this Section 6.1(a) unless and until an Event of Default shall
have occurred and be continuing.

(b)           If any Grantor fails to perform or
comply with any of its agreements contained herein, the Collateral Agent, at
its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.

(c)           The expenses of the Collateral Agent
incurred in connection with actions undertaken as provided in this Section 6.1,
together with interest thereon at the default rate of interest set forth in
Section 2.12 of the Indenture, from the date of payment by the Collateral

 26
 

 

Agent to the date reimbursed by the relevant Grantor,
shall be payable by such Grantor to the Collateral Agent on demand.

(d)           Each Grantor hereby ratifies all that
said attorneys shall lawfully do or cause to be done by virtue hereof.  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby
are released.

6.2           Duty of Collateral Agent.  The Collateral Agent’s sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 or 9-208 of the UCC or otherwise, shall be to
deal with it in the same manner as the Collateral Agent deals with similar
property for its own account.  Neither
the Collateral Agent, nor any other Secured Party nor any of their respective
officers, directors, partners, employees, agents, attorneys and other advisors,
attorneys-in-fact or affiliates shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Secured Parties
hereunder are solely to protect the Secured Parties’ interests in the
Collateral and shall not impose any duty upon any Secured Party  to exercise any such powers.  The Secured Parties shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, partners,
employees, agents, attorneys and other advisors, attorneys-in-fact or
affiliates shall be responsible to any Grantor for any act or failure to act
hereunder, except to the extent that any such act or failure to act is found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted solely and proximately from their own gross negligence or willful
misconduct in breach of a duty owed to such Grantor.

6.3           Filing of Financing Statements.  Each Grantor acknowledges that pursuant to
Section 9-509(b) of the UCC and any other applicable law, each Grantor
irrevocably authorizes the Collateral Agent to file or record financing or
continuation statements, and amendments thereto, and other filing or recording
documents or instruments with respect to the Collateral in such form and in
such offices as the Collateral Agent reasonably determines appropriate to
perfect or maintain the perfection of the security interests of the Collateral
Agent under this Agreement; provided, that neither the Trustee nor the
Collateral Agent shall be responsible or under any obligation whatsoever to
file financing or continuation statements or to make any other filing under the
UCC in connection therewith.  Each
Grantor hereby agrees that such financing statements may describe the collateral
in the same manner as described in the Security Documents or as “all assets” or
“all personal property” of the undersigned, whether now owned or hereafter
existing or acquired by the undersigned. 
If and to the extent permitted by applicable law, a photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.

6.4           Authority of Collateral Agent.  Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to
any action taken by the Collateral Agent or the exercise or non-exercise by the
Collateral Agent of any

 27
 

 

option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement
shall, as between the Collateral Agent and the other Secured Parties, be
governed by the Indenture and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Collateral Agent
and the Grantors, the Collateral Agent shall be conclusively presumed to be
acting as agent for the Secured Parties with full and valid authority so to act
or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.  As among the Noteholders, the Trustee and the
Collateral Agent, (a) the Collateral Agent will hold all items of the
Collateral at any time received under this Agreement in accordance with the
terms of this Agreement and the Indenture and (b) by accepting the benefits of
this Agreement, each Noteholder and the Trustee acknowledges and agrees that
(1) the obligations of the Collateral Agent as holder of the Collateral and any
interests therein and with respect to any disposition of any of the Collateral
or any interest therein, are only those obligations expressly set forth in this
Agreement and the Indenture, and (2) this Agreement may be enforced only by the
action of the Collateral Agent and that no other Secured Party shall have any
right individually to seek to enforce or to enforce this Agreement, it being
understood and agreed that such rights and remedies may be exercised by the
Collateral Agent, for the benefit of the Secured Parties, upon the terms of this
Agreement and the Indenture.

6.5           Appointment of Co-Agent.  At any time or from time to time, in order to
comply with any Legal Requirement, the Collateral Agent may appoint another
bank or trust company or one or more other persons, to act as co-agent on
behalf of the Secured Parties with such power and authority as may be necessary
for the effectual operation of the provisions of this Agreement and which may
be specified in the instrument of appointment (which may, in the discretion of
the Collateral Agent, include provisions for indemnification and similar
protections of such co-agent or separate agent); provided, that the
Collateral Agent shall give prompt notice of such appointment to all Grantors
pursuant to Section 7.2.

SECTION 7.  MISCELLANEOUS

7.1           Amendments in Writing.  None of the terms or provisions of this
Agreement may be waived, amended, amended and restated, supplemented, replaced
or otherwise modified except in writing signed by the Collateral Agent and each
Grantor.  Notwithstanding the foregoing,
supplements or revisions to Schedules made in accordance with or as required by
this Agreement shall be effective without the consent of any party hereto
(other than the Grantor providing such supplement or revision).

7.2           Notices.  All notices, requests and demands to or upon
the Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 14.02 of the Indenture; provided, that any such
notice, request or demand to or upon any Grantor shall be addressed to such Grantor
at the following addresses:

c/o FiberTower
Corporation

185 Berry St., Suite 4800

San Francisco, California

Attn: Thomas Scott

Tel:   (415) 659-3500

 28
 

 

Fax:   (415) 659-0007

with a copy to:

Andrews Kurth LLP

600 Travis Street, Suite 4200

Houston, Texas 77002

Attn: W. Mark Young, Esq.

Tel:   (713) 220-4323

Fax:   (713) 238-7111

7.3           No Waiver by Course of Conduct;
Cumulative Remedies.  No Secured
Party shall by any act (except by a written instrument pursuant to Section
7.1), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default.  No failure to exercise, nor any
delay in exercising, on the part of any Secured Party, any right, power or
privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  A waiver by any Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which such Secured Party would otherwise have on any future
occasion.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

7.4           Enforcement Expenses;
Indemnification.

(a)           Each Grantor agrees to pay or
reimburse each Secured Party and each Secured Parties’ respective officers,
directors, employees, representatives, agents, attorneys and affiliates (each
an “Indemnified Party”) for all their costs and expenses incurred in
collecting against such Grantor in connection with the enforcement or
preservation of any rights under this Agreement and each other document,
instrument or agreement relating to the Secured Obligations to which such
Grantor is a party, including, without limitation, out-of-pocket costs and
expenses (including reasonable fees and disbursements of counsel to each
Secured Party and of counsel to the Collateral Agent).

(b)           Each Grantor agrees to pay, and to
save the Indemnified Parties harmless from, any recording and filing fees and
all liabilities with respect to, or resulting from any Grantor’s delay in
paying stamp, excise, sales or other taxes, if any, which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.

(c)           Each Grantor agrees to pay, and to
save the Indemnified Parties harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments or suits of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement; provided, that no Grantor
shall have any obligation hereunder to any Indemnified Party with respect to
the foregoing to the extent such liabilities,

 29
 

 

obligations, losses, damages, penalties, actions,
judgments or suits may be
attributable to the gross negligence or willful misconduct of such
Indemnified Party.

(d)           The agreements in this Section 7.4
shall survive repayment of the Secured Obligations and all other amounts
payable under any document, instrument or agreement relating to the Secured
Obligations.  The indemnification
provided for in this Section 7.4 is in addition to, and not in limitation of,
any other indemnification or insurance provided by each Grantor to any Secured
Party.

7.5           Successors and Assigns.  This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Secured Parties and their respective successors and assigns; provided,
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement (i) without the prior written consent of the
Collateral Agent and (ii) by operation of law or otherwise, except as permitted
under the Indenture.  The Person serving
as Collateral Agent shall have the right to assign this Agreement and the other
Collateral Agreements to the extent that such Person is no longer serving as
the Trustee in accordance with Section 8.08 of the Indenture.

7.6           Set-Off.  Each Grantor hereby irrevocably authorizes
the Collateral Agent at any time and from time to time while an Event of
Default shall have occurred and be continuing, without notice to such Grantor
or any other Grantor, any such notice being expressly waived by each Grantor,
to set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Collateral Agent to or for the credit or the account of such
Grantor, or any part thereof in such amounts as the Collateral Agent may elect,
against and on account of the obligations and liabilities of such Grantor to
Collateral Agent or the other Secured Parties hereunder and claims of every
nature and description of the Collateral Agent or the other Secured Parties
against such Grantor, in any currency, whether arising hereunder, under the
Indenture, any other Note Document or otherwise, as the Collateral Agent may
elect, whether or not the Collateral Agent has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured.  The Collateral Agent shall
notify such Grantor promptly of any such set-off and the application made by
the Collateral Agent of the proceeds thereof, provided, that the failure
to give such notice shall not affect the validity of such set-off and
application.  The rights of the
Collateral Agent and the other Secured Parties under this Section 7.6 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Collateral Agent or the other Secured Parties may
have.

7.7           Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts (including
by facsimile), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

7.8           Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any

 30
 

 

such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

7.9           Section Headings.  The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.

7.10         Integration.  This Agreement, the other Note Documents and
the Intercreditor Agreement represent the agreement of the Grantors, the
Collateral Agent and the other Secured Parties with respect to the subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by any Secured Party relative to subject matter
hereof and thereof not expressly set forth or referred to herein, in the other
Note Documents and the Intercreditor Agreement.

7.11         GOVERNING LAW.  SUBJECT TO COMPLIANCE WITH PROVISIONS OF
MANDATORY NEW YORK LAW WHICH MAY REQUIRE APPLICATION OF DELAWARE LAW AS TO
CERTAIN ISSUES OF PERFECTION, THE EFFECT OF PERFECTION OR NON-PERFECTION, AND
THE PRIORITY OF SECURITY INTERESTS, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

7.12         Submission to Jurisdiction; Waivers.  Each Grantor hereby irrevocably and
unconditionally:

(a)           submits for itself and its property
in any legal action or proceeding relating to this Agreement and any other
instruments, documents or agreements relating to the Secured Obligations to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;

(b)           consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;

(c)           agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to such Grantor at its address referred to in Section 7.2 or
at such other address of which the Collateral Agent shall have been notified
pursuant thereto;

(d)           agrees that nothing herein shall
affect the right to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction; and

(e)           waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.

 31
 

 

7.13         Waivers by FiberTower.  FiberTower hereby waives, for the benefit of
the Secured Parties:

(a)           any right to require any Secured
Party, as a condition of payment or performance by FiberTower, to (i) proceed
against any other Grantor or any other Person, (ii) proceed against or
exhaust any security held from any other Grantor or any other Person,
(iii) proceed against or have resort to any balance of any deposit account
or credit on the books of any Secured Party in favor of any Grantor or any
other Person, or (iv) pursue any other remedy in the power of any Secured Party
whatsoever;

(b)           any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of any Grantor
including any defense based on or arising out of the lack of validity or the
unenforceability of any of the Secured Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
any Grantor from any cause other than payment in full of all Obligations under
the Indenture and the other Note Documents;

(c)           any defense based upon any statute or
rule of law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that of the
principal;

(d)           any defense based upon any Secured
Party’s administrative errors or omissions, except behavior which amounts to
bad faith;

(e)           (i) any principles or provisions of
law, statutory or otherwise, which are or might be in conflict with the terms
of this Agreement and any legal or equitable discharge of FiberTower’s
obligations hereunder, (ii) the benefit of any statute of limitations affecting
FiberTower’s liability hereunder or the enforcement hereof, (iii) any rights to
set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Secured Party protect, secure, perfect or insure any
security interest or lien or any property subject thereto;

(f)            notices, demands, presentments,
protests, notices of protest, notices of dishonor and notices of any action or
inaction, including acceptance of this Agreement, notices of default under the
Indenture or any agreement or instrument related thereto, notices of any
renewal, extension or modification of the Secured Obligations or any agreement
related thereto and notices of any extension of credit to the Grantors; and

(g)           any defenses or benefits that may be
derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms of this Agreement.

7.14         Acknowledgments.  Each Grantor hereby acknowledges that:

(a)           it has been advised by counsel in the
negotiation, execution and delivery of this Agreement;

 32
 

 

(b)           no Secured Party  has any fiduciary relationship with or duty
to any Grantor arising out of or in connection with this Agreement or any of
the other Note Documents, and the relationship between the Grantors, on the one
hand, and the Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

(c)           no joint venture is created hereby or
by any other documents, agreements or instruments relating to the Secured
Obligations or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Grantors and the Secured Parties.

7.15         Additional Grantors.  Each Affiliate of FiberTower that is required
to become a party to this Agreement pursuant to any document, agreement or
instrument relating to the Secured Obligations shall become a Grantor for all
purposes of this Agreement upon execution and delivery by such Affiliate of an
Assumption Agreement in the form of Annex 1 hereto.

7.16         Releases.

(a)           At such time as the Secured
Obligations (other than unmatured contingent reimbursement and indemnification
obligations) shall have been Discharged, the Collateral shall be released from
the Liens created hereby, and this Agreement and all obligations (other than
those expressly stated to survive such termination) of the Collateral Agent and
each Grantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors.  At the request
and sole expense of any Grantor following any such termination, the Collateral
Agent shall deliver to such Grantor any of such Grantor’s Collateral held by
the Collateral Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such
termination.

(b)           In the case of any Released Assets,
the Collateral Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral.

(c)           Each Grantor acknowledges that it is
not authorized to file any financing statement or amendment or termination
statement with respect to any financing statement originally filed in
connection herewith without the prior written consent of the Collateral Agent
subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.

7.17         WAIVER OF JURY TRIAL.  EACH GRANTOR AND THE COLLATERAL AGENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

7.18         Certain Regulatory Requirements.  Any provision herein or in any other
agreement to the contrary notwithstanding, the Collateral Agent will not take
any action pursuant to this Agreement, or any other agreement between any
Grantor and the Collateral Agent, or any

 33
 

 

other agreement with respect to the Notes, the
Indenture, the Intercreditor Agreement, or the Noteholders, that would
constitute or result in any de facto or de jure assignment of an FCC License or
transfer of control of any Grantor, if such assignment of license or transfer
of control would require under then existing law (including the Communications
Act), the prior approval of the FCC, without first obtaining such approval of
the FCC.  Any disposition of the Pledged
Stock will be conducted in accordance with the then applicable requirements of
the Communications Act.  Each Grantor
agrees that, if an Event of Default shall have occurred and be continuing, upon
request from time to time by the Collateral Agent during such circumstance it
shall use all commercially reasonable efforts to obtain any governmental
authorizations referred to in this Section 7.18, including upon any request of
the Collateral Agent following the occurrence and during the continuance of an
Event of Default, to prepare, sign and file with the FCC (or cause to be
prepared signed and filed with the FCC) any application or applications that
are necessary or appropriate under the FCC’s rules and regulations for consent
to the assignment of the FCC Licenses held by such Grantor or to the transfer
of control of such Grantor.

7.19         Subordination.  The security interests securing the
indebtedness and other obligations under the Indenture, the Notes and the Note
Guarantees (as defined in the Indenture) will be subordinated to the security
interests securing any future indebtedness and other obligations under a
certain senior secured Working Capital Facility that FiberTower and one or more
Guarantors may enter into after the date of the Indenture.  A copy of the form of Intercreditor Agreement
governing such subordination is available from FiberTower upon written request.

[Signature Page Follows]

 34

 

IN WITNESS WHEREOF, each of the undersigned has caused
this Pledge and Security Agreement to be duly executed and delivered as of the
date first above written.

	
  

  	
  FIBERTOWER CORPORATION,

  a Delaware corporation,

  as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS A. SCOTT

  
	
   

  	
  Name:

  	
  Thomas A. Scott

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIBERTOWER NETWORK SERVICES CORP.,

  a Delaware corporation,

  as a Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS A. SCOTT

  
	
   

  	
  Name:

  	
  Thomas A. Scott

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ART LEASING, INC.,

  a Delaware corporation,

  as a Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS A. SCOTT

  
	
   

  	
  Name:

  	
  Thomas A. Scott

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ART LICENSING CORPORATION,

  a Delaware corporation,

  as a Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS A. SCOTT

  
	
   

  	
  Name:

  	
  Thomas A. Scott

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

 

 

	
  

  	
  TELIGENT SERVICES ACQUISITION, INC.,

  a Delaware corporation,

  as a Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS A. SCOTT

  
	
   

  	
  Name:

  	
  Thomas A. Scott

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIBERTOWER SOLUTIONS CORPORATION,

  a Delaware corporation,

  as a Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS A. SCOTT

  
	
   

  	
  Name:

  	
  Thomas A. Scott

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PATRICK T. GIORDANO

  
	
   

  	
  Name:

  	
  Patrick T. Giordano

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

 

Schedule 1

DESCRIPTION OF PLEDGED INVESTMENT PROPERTY

Pledged Stock:

 

	
  Issuer

  	
   

  	
  Issuer’s

  Jurisdiction

  Under

  UCC

  Section 8-110(d)

  	
   

  	
  Class of Stock

  or other equity

  interest

  	
   

  	
  Stock or

  Membership

  Interest

  Certificate No.

  	
   

  	
  Percentage

  of Shares

  	
   

  	
  No. of

  Shares

  	
   

  	
  Owner of

  Record

  	
   

  
	
  FiberTower Network
  Services Corp.

  	
   

  	
  Delaware

  	
   

  	
  Common
  Stock

  	
   

  	
  001

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  	
  FiberTower Corporation

  	
   

  
	
  ART Leasing, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common
  Stock

  	
   

  	
  001

  	
   

  	
  100

  	
  %

  	
  100

  	
   

  	
  FiberTower Corporation

  	
   

  
	
  ART Licensing
  Corporation

  	
   

  	
  Delaware

  	
   

  	
  Common
  Stock

  	
   

  	
  001

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  	
  FiberTower Corporation

  	
   

  
	
  FiberTower Solutions
  Corporation

  	
   

  	
  Delaware

  	
   

  	
  Common
  Stock

  	
   

  	
  001

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  	
  FiberTower Corporation

  	
   

  
	
  Teligent Services Acquisition, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common Stock

  	
   

  	
  001

  	
   

  	
  100

  	
  %

  	
  1,000

  	
   

  	
  FiberTower Corporation

  	
   

  

 

Pledged Notes:

None.

Pledged Debt Securities:

None.

Pledged Security Entitlements:

None.

Pledged Commodity Contracts:

None.

 

 1-1

 

Schedule 2

Uniform Commercial Code Filings

	
   

  	
  Entity

  	
   

  	
   

  	
  Jurisdiction (SOS)

  	
   

  
	
  FiberTower Corporation

  	
  Delaware

  
	
  FiberTower Network
  Services Corp.

  	
  Delaware

  
	
  ART Leasing, Inc.

  	
  Delaware

  
	
  ART Licensing
  Corporation

  	
  Delaware

  
	
  FiberTower Solutions
  Corporation

  	
  Delaware

  
	
  Teligent Services Acquisition, Inc.

  	
  Delaware

  

 

Copyright, Patent and Trademark Filings

1.  
Intellectual Property Security Agreement, dated November 9, 2006, by
FiberTower Solutions Corporation in favor of Collateral Agent

Actions with respect to Investment Property

None.

Other Actions

None.

 2-1

 

Schedule 3

EXACT LEGAL NAME,

LOCATION OF JURISDICTION OF ORGANIZATION AND

LOCATION OF CHIEF EXECUTIVE OFFICE

	
   

  	
  Grantor

  	
   

  	
   

  	
  Jurisdiction

  	
   

  	
   

  	
  Location

  	
   

  
	
  FiberTower Corporation

  	
  Delaware

  	
  185 Berry St., Suite
  4800 San Francisco, California

  
	
  FiberTower Network
  Services Corp.

  	
  Delaware

  	
  185 Berry St., Suite
  4800 San Francisco, California

  
	
  ART Leasing, Inc.

  	
  Delaware

  	
  7925 Jones Branch
  Drive, Suite 3300 McLean, Virginia

  
	
  ART Licensing
  Corporation

  	
  Delaware

  	
  7925 Jones Branch
  Drive, Suite 3300 McLean, Virginia

  
	
  FiberTower Solutions
  Corporation

  	
  Delaware

  	
  7925 Jones Branch
  Drive, Suite 3300 McLean, Virginia

  
	
  Teligent Services Acquisition, Inc.

  	
  Delaware

  	
  7925 Jones Branch Drive, Suite 3300 McLean, Virginia

  

 

 3-1

Schedule 4

LOCATION OF INVENTORY AND EQUIPMENT

	
  

  	
  Grantor

  	
   

  	
   

  	
  Location

  	
   

  
	
  FiberTower
  Corporation

  	
  185 Berry St.,
  Suite 4800

  San Francisco, California

  
	
   

  	
   

  
	
   

  	
  7925 Jones
  Branch Drive, Suite 3300

  McLean, Virginia

  
	
   

  	
   

  
	
   

  	
  Metro Corporate
  Campus, 99 Wood Avenue South, Suite 200

  Iselin, New Jersey

  
	
   

  	
   

  
	
   

  	
  Armstrong Field
  Lab, Route 9W

  Alpine, New Jersey

  
	
   

  	
   

  
	
   

  	
  44050 Mercure
  Circle

  Dulles, VA

  
	
   

  	
   

  
	
   

  	
  1730 Rhode
  Island Avenue, NW, Suite 317

  Washington, D.C.

  
	
   

  	
   

  
	
  FiberTower
  Network Services Corp.

  	
  185 Berry St.,
  Suite 4800

  San Francisco, California

  
	
   

  	
   

  
	
   

  	
  720 Avenue F,
  Suite 109

  Plano Texas 75074

  
	
   

  	
   

  
	
   

  	
  2613-2614 Gravel
  Drive

  Fort Worth, TX 76118

  
	
   

  	
   

  
	
   

  	
  12131 Colwick

  San Antonio, TX 78216

  
	
   

  	
   

  
	
   

  	
  101 Route 46
  East

  Pine Brook, NJ 07058

  
	
   

  	
   

  
	
   

  	
  7340 South Alton
  Way, Suite 11H

  Centennial, CO 80112

  
	
   

  	
   

  
	
   

  	
  145 Ken Mar
  Industrial Parkway

  Broadview Heights, OH 44147

  
	
   

  	
   

  
	
   

  	
  6300 Rothway,
  Suite 150

  Houston, TX 77040

  
	
   

  	
   

  
	
   

  	
  5801 Benjamin
  Center Drive, Suite 101

  Tampa, FL 33634

  

 

 4-1
 

 

	
  

  	
   

  
	
   

  	
  100 Executive Drive, Unit 1

  Sterling, VA 20166

  
	
   

  	
   

  
	
   

  	
  245 Main Street, 6th Floor

  White Plains, NY 10601

  
	
   

  	
   

  
	
   

  	
  146 Rangeway Road, Unit 146B

  Billerica, MA 01862

  
	
   

  	
   

  
	
   

  	
  125-126 Washington Street, Suite 2

  Foxboro, MA 02035

  
	
   

  	
   

  
	
   

  	
  44780 Helm Street, Suites T and U

  Plymouth, MI 48170

  
	
   

  	
   

  
	
   

  	
  10210 Werch Drive, Suite 308

  Woodridge, IL 60517

  
	
   

  	
   

  
	
   

  	
  908 North Bowser Road

  Richardson, TX 75081

  
	
   

  	
   

  
	
   

  	
  321 Nolan Street

  San Antonio, TX 78202

  
	
   

  	
   

  
	
   

  	
  5910 Technicenter Drive

  Austin, TX 78721

  
	
   

  	
   

  
	
   

  	
  2355 Delgany Street

  Denver, CO 80216

  
	
   

  	
   

  
	
   

  	
  29B Concord Street, Suite 2

  Reading, MA 01864

  
	
   

  	
   

  
	
   

  	
  1435 West 150th Street

  Cleveland, OH 44111

  
	
   

  	
   

  
	
   

  	
  747 North Shephard

  Houston, TX 77007

  
	
   

  	
   

  
	
   

  	
  5456 West Crenshaw

  Tampa, FL 33634

  
	
   

  	
   

  
	
   

  	
  3132 Industrial Boulevard

  Bethel Park, PA 15102

  

 

 4-2
 

 

	
  

  	
   

  
	
   

  	
  1 Dodge Drive

  West Caldwell, NJ 07006

  
	
   

  	
   

  
	
   

  	
  1 Edison Place

  Fairfield, NJ 07004

  
	
   

  	
   

  
	
   

  	
  46051 Michigan Avenue

  Canton, MI 48188

  
	
   

  	
   

  
	
   

  	
  4607 Eisenhower Avenue

  Alexandria, VA 22304

  
	
   

  	
   

  
	
   

  	
  1243 Naperville Drive

  Romeoville, IL 60446

  
	
   

  	
   

  
	
   

  	
  3703 N. Pan Am Express-way

  San Antonio, TX 78219

  
	
   

  	
   

  
	
   

  	
  11604 Stonehollow Drive

  Austin, TX 78758

  
	
   

  	
   

  
	
   

  	
  2228 Wirtcrest, Suite A

  Houston, TX 77055

  
	
   

  	
   

  
	
   

  	
  23305 Commerce Dr.

  Farmington Hills, MI 48335

  
	
   

  	
   

  
	
   

  	
  1200 Greenbriar Drive

  Addison, IL 60101

  
	
   

  	
   

  
	
  ART Leasing, Inc.

  	
  7925 Jones Branch Drive, Suite 3300

  McLean, Virginia

  
	
   

  	
   

  
	
   

  	
  Metro Corporate Campus, 99 Wood Avenue South, Suite
  200

  Iselin, New Jersey

  
	
   

  	
   

  
	
  ART Licensing Corporation

  	
  7925 Jones Branch Drive, Suite 3300

  McLean, Virginia

  
	
   

  	
   

  
	
   

  	
  Metro Corporate Campus, 99 Wood Avenue South, Suite
  200

  Iselin, New Jersey

  
	
   

  	
   

  
	
  FiberTower Solutions Corporation

  	
  7925 Jones Branch Drive, Suite 3300

  McLean, Virginia

  
	
   

  	
   

  
	
   

  	
  Metro Corporate Campus, 99 Wood Avenue South, Suite
  200

  Iselin, New Jersey

  
	
   

  	
   

  

 

 4-3
 

 

	
  Teligent Services Acquisition, Inc.

  	
  7925 Jones Branch Drive, Suite 3300

  McLean, Virginia

  
	
   

  	
   

  
	
   

  	
  Metro Corporate Campus, 99 Wood Avenue South, Suite
  200

  Iselin, New Jersey

  
	
   

  	
   

  
	
   

  	
  All “Network Sites” which include those locations
  where a Grantor has installed Equipment as part of its networks used to
  provide telecommunications services to its customers, other than an office or
  a warehouse location.

  

 

 

 4-4

 

Schedule 5

TRADEMARKS

	
  

  	
  Owner

  	
   

  	
   

  	
   

  	
  Application

  Number

  	
   

  	
   

  	
   

  	
  Trademark

  	
   

  
	
  FiberTower
  Solutions Corporation

  	
   

  	
  78/752956

  	
   

  	
  MuniFrame

  

 

COPYRIGHTS

None.

PATENTS

None.

TRADE SECRETS

None.

INTELLECTUAL PROPERTY LICENSES

None.

OTHER INTELLECTUAL PROPERTY

None.

 

 5-1

 

Schedule 6

VEHICLES

None.

 6-1

 

Schedule 7

UCC FINANCING STATEMENTS TO BE TERMINATED

	
   

  	
  Debtor

  	
   

  	
   

  	
   

  	
  Secured Party

  	
   

  	
   

  	
  UCC

  Financing

  Statement #

  	
   

  	
   

  	
  Jurisdiction of

  Filing

  	
   

  
	
  ART Licensing Corp.

  	
   

  	
  Banc One Trust Company,
  N.A.

  	
   

  	
  11781504

  	
   

  	
  Delaware Secretary of
  State

  
	
  ART Leasing Inc.

  	
   

  	
  Banc One Trust Company,
  N.A.

  	
   

  	
  11781462

  	
   

  	
  Delaware Secretary of
  State

  
	
  Big Creek Systems, LLC

  	
   

  	
  Banc One Trust Company, N.A.

  	
   

  	
  11781488

  	
   

  	
  Delaware Secretary of State

  

 

 7-1

Exhibit A to

Pledge and Security Agreement

FORM OF ACKNOWLEDGMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy
of the Pledge and Security Agreement dated as of November 9, 2006 (the “Agreement”),
made by the parties thereto for the benefit of Wells Fargo Bank, National
Association, as collateral agent for the Secured Parties (in such capacity the “Collateral
Agent”).  Capitalized terms used but
not defined herein shall have the meanings given such terms in the
Agreement.  The undersigned agrees for
the benefit of the Collateral Agent and the Secured Parties as follows:

1.             The
undersigned will be bound by the terms of the Agreement and will comply with
such terms in each case insofar as such terms are applicable to the
undersigned.

2.             The
undersigned confirms the statements made in the Agreement with respect to the
undersigned including, without limitation, in Section 3.6 and Schedule 2.

3.             The
undersigned will notify the Collateral Agent promptly in writing of the
occurrence of any of the events described in Section 4.4(a) of the Agreement.

4.             The
terms of Sections 5.3(c) and 5.7 of the Agreement shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it
pursuant to Section 5.3(c) or 5.7 of the Agreement.

	
  

  	
  [NAME OF ISSUER]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  
					

 

 A-1

 

Exhibit B-1
to

Pledge and Security Agreement

FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

This INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated
as of ______________, 200_ (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Intellectual Property Security
Agreement”), is made by each of the signatories hereto (collectively, the “Grantors”)
in favor of Wells Fargo Bank, National Association, as collateral agent for the
Secured Parties (as defined in the Security Agreement referred to below) (in
such capacity, the “Collateral Agent”). 
Capitalized terms used but not otherwise defined herein shall have the
meanings given such terms in the Security Agreement.

WHEREAS, the Grantors have executed and delivered that
certain Pledge and Security Agreement, dated as of November 9, 2006, in favor
of the Collateral Agent (as amended, amended and restated, supplemented,
replaced or otherwise modified from time to time, the “Security Agreement”).

WHEREAS, under the terms of the Security Agreement,
the Grantors have granted a security interest in certain assets, including,
without limitation, certain Intellectual Property of the Grantors, to the
Collateral Agent for the benefit of the Secured Parties, and have agreed as a
condition thereof to execute Intellectual Property Security Agreements for
recording with the United States Patent and Trademark Office, the United States
Copyright Office, and other applicable Governmental Authorities.

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantors
agree as follows:

SECTION 1.           Grant of Security.  Each Grantor hereby grants to the Collateral
Agent for the benefit of the Secured Parties a security interest in and to all
of such Grantor’s right, title and interest in and to the following (the “Intellectual
Property Collateral”), as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations:

(a)           (i) all trademarks, service marks,
trade names, corporate names, company names, business names, trade dress, trade
styles, logos, or other indicia of origin or source identification, internet
domain names, trademark and service mark registrations, and applications for
trademark or service mark registrations and any new renewals thereof,
including, without limitation, each registration and application identified in
Schedule 1, (ii) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations thereof,
(iii) all income, royalties, damages and other payments now and hereafter
due and/or payable with respect thereto (including, without limitation,
payments under all licenses entered into in connection therewith, and damages
and payments for past, present or future infringements thereof), and (iv) all
other rights of any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto, together in each case with the goodwill of the business
connected with the use of, and symbolized by, each of the above (collectively,
the “Trademarks”);

 B-1-1
 

 

(b)           (i) all patents, patent applications
and patentable inventions, including, without limitation, each issued patent
and patent application identified in Schedule 1, and all certificates of
invention or similar industrial property rights, (ii) all inventions and
improvements described and claimed therein, (iii) the right to sue or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (iv) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past, present or future infringements
thereof), and (v) all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals, and extensions thereof, all
improvements thereon and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto (collectively, the “Patents”);

(c)           (i) all copyrights, whether or not
the underlying works of authorship have been published, including, but not
limited to, copyrights in software and databases, all Mask Works (as defined in
17 U.S.C. 901 of the U.S. Copyright Act) and all such underlying  works of authorship and other intellectual
property rights therein, all copyrights of works based on, incorporated in,
derived from or relating to works covered by such copyrights, all right, title
and interest to make and exploit all derivative works based on or adopted from
works covered by such copyrights, and all copyright registrations and copyright
applications, and any renewals or extensions thereof, including, without
limitation, each registration and application identified in Schedule 1,
(ii) the rights to print, publish and distribute any of the foregoing, (iii)
the right to sue or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (iv) all income, royalties,
damages and other payments now and hereafter due and/or payable with respect
thereto (including, without limitation, payments under all licenses entered
into in connection therewith, and damages and payments for past, present or
future infringements thereof), and (v) all other rights of any kind whatsoever
of such Grantor accruing thereunder or pertaining thereto (“Copyrights”);

(d)           (i) all trade secrets and all
confidential and proprietary information, including know-how, manufacturing and
production processes and techniques, inventions, research and development
information, technical data, financial, marketing and business data, pricing
and cost information, business and marketing plans, and customer and supplier
lists and information, including, without limitation, any of the foregoing
identified in Schedule 1, (ii) the right to sue or otherwise recover for
any and all past, present and future infringements and misappropriations
thereof, (iii) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past, present or future infringements thereof),
and (iv) all other rights of any kind whatsoever of such Grantor accruing
thereunder or pertaining thereto (collectively, the “Trade Secrets”);

(e)           (i) all licenses or agreements,
whether written or oral, providing for the grant by or to any Grantor of:  (A) any right to use any Trademark or Trade
Secret, (B) any right to manufacture, use or sell any invention covered in
whole or in part by a Patent, and (C) any right under any Copyright including,
without limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright including, without limitation, any of
the foregoing identified in Schedule 1, (ii) the right to sue or otherwise
recover for any and all past, present and future infringements and misappropriations
of any of the foregoing,

 B-1-2
 

 

(iii) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past, present or future infringements
thereof), and (iv) all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto; and

(f)            any and all proceeds of the
foregoing.

Notwithstanding the foregoing, the Intellectual
Property Collateral shall not include any Excluded Collateral.

SECTION 2.           Recordation.  Each Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any
other applicable government officer record this Intellectual Property Security
Agreement.

SECTION 3.           Execution in Counterparts.  This Agreement may be executed in any number
of counterparts (including by facsimile), each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement.

SECTION 4.           Governing Law.  This Intellectual Property Security Agreement
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.

SECTION 5.           Conflict Provision.  This Intellectual Property Security Agreement
has been entered into in conjunction with the provisions of the Security
Agreement.  The rights and remedies of
each party hereto with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference.  In the event that any provisions
of this Intellectual Property Security Agreement are in conflict with the
Security Agreement, the provisions of the Security Agreement shall govern.

SECTION 6.           Subordination.  The security interests securing the
indebtedness and other obligations under the Indenture, the Notes and the Note
Guarantees will be subordinated to the security interests securing any future
indebtedness and other obligations under a certain senior secured Working
Capital Facility that Grantor may enter into after the date of the Indenture.  A copy of the form of Intercreditor Agreement
governing such subordination is available from Grantor upon written request.

 B-1-3
 

 

IN WITNESS WHEREOF, each of the undersigned has caused
this Intellectual Property Security Agreement to be duly executed and delivered
as of the date first above written.

	
  

  	
  [NAME OF
  GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 B-1-4
 

 

Schedule 1

COPYRIGHTS

PATENTS

TRADEMARKS

TRADE SECRETS

INTELLECTUAL PROPERTY LICENSES

 B-1-5

 

Exhibit B-2
to

Pledge and Security Agreement

FORM OF AFTER-ACQUIRED INTELLECTUAL PROPERTY SECURITY AGREEMENT

(FIRST SUPPLEMENTAL FILING)

This INTELLECTUAL PROPERTY SECURITY AGREEMENT (FIRST
SUPPLEMENTAL FILING), dated as of ___________________ (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “After-Acquired
Intellectual Property Security Agreement”), is made by each of the
signatories hereto (collectively, the “Grantors”) in favor of Wells
Fargo Bank, National Association, as collateral agent for the Secured Parties
(as defined in the Security Agreement referred to below) (in such capacity, the
“Collateral Agent”).  Capitalized
terms used but not otherwise defined herein shall have the meanings given such
terms in the Security Agreement.

WHEREAS, the Grantors have executed and delivered that
certain Pledge and Security Agreement, dated as of November 9, 2006, in favor
of the Collateral Agent (as amended, amended and restated, supplemented,
replaced or otherwise modified from time to time, the “Security Agreement”).

WHEREAS, under the terms of the Security Agreement,
the Grantors have granted a security interest in certain assets, including,
without limitation, certain Intellectual Property, including but not limited to
After-Acquired Intellectual Property of the Grantors, to the Collateral Agent
for the benefit of the Secured Parties, and have agreed as a condition thereof
to execute an After-Acquired Intellectual Property Security Agreement for
recording with the United States Patent and Trademark Office, the United States
Copyright Office, and other applicable Governmental Authorities.

WHEREAS, the Intellectual Property Security Agreement
was recorded against certain United States Intellectual Property at [INSERT REEL/FRAME NUMBER] [IF SECOND OR LATER SUPPLEMENTAL, ADD PRIOR
REEL/FRAME NUMBERS].

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantors
agree as follows:

SECTION 1.           Grant of Security.  Each Grantor hereby grants to the Collateral
Agent for the benefit of the Secured Parties a security interest in and to all
of such Grantor’s right, title and interest in and to the following (the “Intellectual
Property Collateral”), as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations:

(a)           (i) all trademarks, service marks,
trade names, corporate names, company names, business names, trade dress, trade
styles, logos, or other indicia of origin or source identification, internet
domain names, trademark and service mark registrations, and applications for
trademark or service mark registrations and any new renewals thereof,
including, without limitation, each registration and application identified in
Schedule 1, (ii) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations

 B-2-1
 

 

thereof, (iii) all income, royalties, damages and
other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past, present or future
infringements thereof), and (iv) all other rights of any kind whatsoever of
such Grantor accruing thereunder or pertaining thereto, together in each case
with the goodwill of the business connected with the use of, and symbolized by,
each of the above (collectively, the “Trademarks”);

(b)           (i) all patents, patent applications
and patentable inventions, including, without limitation, each issued patent
and patent application identified in Schedule 1, and all certificates of
invention or similar industrial property rights, (ii) all inventions and improvements
described and claimed therein, (iii) the right to sue or otherwise recover for
any and all past, present and future infringements and misappropriations
thereof, (iv) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past, present or future infringements thereof),
and (v) all reissues, divisions, continuations, continuations-in-part,
substitutes, renewals, and extensions thereof, all improvements thereon and all
other rights of any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto (collectively, the “Patents”);

(c)           (i) all copyrights, whether or not
the underlying works of authorship have been published, including, but not
limited to, copyrights in software and databases, all Mask Works (as defined in
17 U.S.C. 901 of the U.S. Copyright Act) and all such underlying works of
authorship and other intellectual property rights therein, all copyrights of
works based on, incorporated in, derived from or relating to works covered by
such copyrights, all right, title and interest to make and exploit all
derivative works based on or adopted from works covered by such copyrights, and
all copyright registrations and copyright applications, and any renewals or
extensions thereof, including, without limitation, each registration and
application identified in Schedule 1, (ii) the rights to print, publish
and distribute any of the foregoing, (iii) the right to sue or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (iv) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past, present or future infringements
thereof), and (v) all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto (“Copyrights”);

(d)           (i) all trade secrets and all
confidential and proprietary information, including know-how, manufacturing and
production processes and techniques, inventions, research and development
information, technical data, financial, marketing and business data, pricing
and cost information, business and marketing plans, and customer and supplier
lists and information, including, without limitation, any of the foregoing
identified in Schedule 1, (ii) the right to sue or otherwise recover for
any and all past, present and future infringements and misappropriations
thereof, (iii) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without limitation,
payments under all licenses entered into in connection therewith, and damages
and payments for past, present or future infringements thereof), and (iv) all
other rights of any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto (collectively, the “Trade Secrets”);

 B-2-2
 

 

(e)           (i) all licenses or agreements,
whether written or oral, providing for the grant by or to any Grantor of:  (A) any right to use any Trademark or Trade
Secret, (B) any right under any Patent, and (C) any right under any Copyright,
(ii) the right to sue or otherwise recover for any and all past, present and
future infringements and misappropriations of any of the foregoing, (iii) all
income, royalties, damages and other payments now and hereafter due and/or payable
with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for
past, present or future infringements thereof), and (iv) all other rights of
any kind whatsoever of such Grantor accruing thereunder or pertaining thereto;
and

(f)            any and all proceeds of the
foregoing.

Notwithstanding the foregoing, the Intellectual
Property Collateral shall not include any Excluded Collateral.

SECTION 2.           Recordation.  Each Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any
other applicable government officer record this After-Acquired Intellectual
Property Security Agreement.

SECTION 3.           Execution in Counterparts.  This Agreement may be executed in any number
of counterparts (including by facsimile), each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement.

SECTION 4.           Governing Law.  This After-Acquired Intellectual Property
Security Agreement shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.

SECTION 5.           Conflict Provision.  This After-Acquired Intellectual Property
Security Agreement has been entered into in conjunction with the provisions of
the Security Agreement.  The rights and
remedies of each party hereto with respect to the security interest granted
herein are without prejudice to, and are in addition to those set forth in the
Security Agreement, all terms and provisions of which are incorporated herein
by reference.  In the event that any
provisions of this After-Acquired Intellectual Property Security Agreement are
in conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.

SECTION 6.           Subordination.  The security interests securing the
indebtedness and other obligations under the Indenture, the Notes and the Note
Guarantees will be subordinated to the security interests securing any future
indebtedness and other obligations under a certain senior secured Working
Capital Facility that Grantor may enter into after the date of the
Indenture.  A copy of the form of
Intercreditor Agreement governing such subordination is available from Grantor
upon written request.

 B-2-3
 

 

IN WITNESS WHEREOF, each of the undersigned has caused
this After-Acquired Intellectual Property Security Agreement to be duly
executed and delivered as of the date first above written.

	
  

  	
  [NAME OF
  GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 B-2-4
 

 

Schedule 1

COPYRIGHTS

PATENTS

TRADEMARKS

TRADE SECRETS

INTELLECTUAL PROPERTY LICENSES

 B-2-5

 

Exhibit C to

Pledge and Security Agreement

FORM OF CONTROL AGREEMENT

This CONTROL AGREEMENT (as amended, amended and
restated, supplemented, replaced or otherwise modified from time to time, the “Control
Agreement”), dated as of [________ ___], 200[__], is made by and among
_______________, a __________ (the “Grantor”), ____________, a
____________ (the “Issuer”), and Wells Fargo Bank, National Association,
as collateral agent under the Security Agreement (as defined below) for and on
behalf of the Secured Parties (as defined therein) (together with its
successors and assigns in such capacity, the “Collateral Agent”).

WHEREAS, [the Grantor], [the
Issuer],  [_____________],
[_____________] and Wells Fargo Bank, National Association, in its
capacity as trustee on behalf of the holders of the notes issued from time to
time thereunder, have entered into that certain Indenture, dated as of November
9, 2006 (as amended, amended and restated, supplemented, replaced or otherwise
modified from time to time, the “Indenture”);

WHEREAS, the Grantor has granted to the Collateral
Agent, for the benefit of the Secured Parties, a security interest in the
uncertificated securities of the Issuer owned by the Grantor from time to time
(collectively, the “Pledged Securities”), and all additions thereto and
substitutions and proceeds thereof (collectively, with the Pledged Securities,
the “Collateral”) pursuant to that certain Pledge and Security
Agreement, dated as of November 9, 2006 (as amended, amended and restated,
supplemented, replaced or otherwise modified from time to time, the “Security
Agreement”), among the Grantor and the other persons party thereto as
grantors in favor of the Collateral Agent; and

WHEREAS, the following terms, which are defined in
Articles 8 and 9 of the Uniform Commercial Code in effect in the State of New
York on the date hereof (the “UCC”), are used herein as so defined:  adverse claim, control, instruction, proceeds
and uncertificated security.

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

SECTION 1.           Notice of Security Interest.  The Grantor, the Collateral Agent and the
Issuer are entering into this Control Agreement to perfect, and to confirm the
priority of, the Collateral Agent’s security interest in the Collateral.  The Issuer acknowledges that this Control
Agreement constitutes written notification to the Issuer of the Collateral
Agent’s security interest in the Collateral. 
The Issuer agrees to promptly make all necessary entries or notations in
its books and records to reflect the Collateral Agent’s security interest in
the Collateral and, upon request by the Collateral Agent, to register the
Collateral Agent as the registered owner of any or all of the Pledged
Securities.  The Issuer acknowledges that
the Collateral Agent has control over the Collateral.

SECTION 2.           Collateral.  The Issuer hereby represents and warrants to,
and agrees with the Grantor and the Collateral Agent that, (i) the terms of any
limited liability

 C-1
 

 

company interests or partnership interests included in
the Collateral from time to time shall expressly provide that they are
securities governed by Article 8 of the Uniform Commercial Code in effect from
time to time in the State of New York or any other applicable jurisdiction, as
applicable, (ii) the Pledged Securities are uncertificated securities,
(iii) the issuer’s jurisdiction is, and during the term of this Control
Agreement shall remain, the State of ____________, (iv) Schedule 1
contains a true and complete description of the Pledged Securities as of the
date hereof and (v) except for the claims and interests of the Grantor and
the Collateral Agent, in each case as described herein, in the Collateral, the
Issuer does not know of any claim to or security interest or other interest in
the Collateral.

SECTION 3.           Control.  The Issuer hereby agrees, upon written
direction from the Collateral Agent and without further consent from the
Grantor, (a) to comply with all instructions and directions of any kind
originated by the Collateral Agent concerning the Collateral, to liquidate or
otherwise dispose of the Collateral as and to the extent directed by the
Collateral Agent and to pay over to the Collateral Agent all proceeds without
any setoff or deduction, and (b) except as otherwise directed by the Collateral
Agent, not to comply with the instructions or directions of any kind originated
by the Grantor or any other person at any time after the Issuer has received
written notice from the Collateral Agent that it is no longer to follow such
instructions from the Grantor (and thereafter not until such time as the
Collateral Agent sends written notice to the Issuer that it is permitted to
follow such instructions from the Grantor).  Until such time as the Issuer has received
notice from the Collateral Agent that it is no longer to follow such
instructions from the Grantor (and after such time as the Issuer has received
notice from the Collateral Agent that it is permitted to follow such
instructions from the Grantor), the Issuer shall comply with all instructions
and directions of any kind originated by the Grantor to the extent they do not
conflict with this Control Agreement or any written instructions or directions
of the Collateral Agent, except that the Issuer shall not deliver the
Collateral to the Grantor.  The intent of
the foregoing is to perfect the security interest of the Collateral Agent for
the benefit of the Secured Parties granted pursuant to the Security Agreement.

SECTION 4.           Intercreditor Agreement.  Notwithstanding anything herein to the
contrary, the lien and security interest granted to the Collateral Agent
pursuant to this Control Agreement and the exercise of any right or remedy by
the Collateral Agent hereunder shall be subject to the provisions of the
Intercreditor Agreement (as defined in the Security Agreement) if then in
effect, and, in the event of any conflict between the terms of the
Intercreditor Agreement and this Control Agreement, the terms of the Intercreditor
Agreement shall govern and control.

SECTION 5.           Other Agreements.  The Issuer shall notify promptly the
Collateral Agent and the Grantor if any other person asserts any lien,
encumbrance, claim (including any adverse claim) or security interest in or
against any of the Collateral upon becoming aware of such assertion.  Except as provided in Section 4 above, in the
event of any conflict between the provisions of this Control Agreement and any
other agreement governing any of the Collateral, the provisions of this Control
Agreement shall control.

SECTION 6.           Protection of Issuer.  The Issuer may rely and shall be protected in
acting upon any notice, instruction or other communication that it reasonably
believes to be genuine and authorized.

 C-2
 

 

SECTION 7.           Termination.  This Control Agreement shall terminate
automatically upon receipt by the Issuer of written notice executed by the
Collateral Agent that (i) all of the obligations (excluding unmatured
contingent reimbursement and indemnification obligations) secured by the
Collateral have been satisfied in accordance with any agreements applicable
thereto, or (ii) the security interest in all of the Collateral has been
released, whichever is sooner, and the Issuer shall thereafter be relieved of
all duties and obligations hereunder. 
Upon request by the Grantor, the Collateral Agent agrees to provide a
Notice of Termination in substantially the form of Exhibit A hereto to the
Issuer upon the termination of this Control Agreement in accordance with the
foregoing.

SECTION 8.           Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made on the earlier of delivery, or three days after
being deposited in the mail and sent by first-class mail, postage prepaid, or,
in the case of facsimile notice, when received, to the Grantor’s and the
Collateral Agent’s addresses as set forth in the Security Agreement, and to the
Issuer’s address as set forth below, or to such other address as any party may
give to the others in writing for such purpose:

[Name of Issuer]

[Address of Issuer]

Attn:                                             

Tel:      (        )
    -        

Fax:     (        )
    -        

SECTION 9.           Amendments in Writing.  None of the terms or provisions of this
Control Agreement may be waived, amended, amended and restated, supplemented,
replaced or otherwise modified except by a written instrument executed by the
parties hereto.

SECTION 10.         Entire Agreement. This Control
Agreement and the Security Agreement constitute the entire agreement and
supersede all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.

SECTION 11.         Execution in Counterparts.  This Control Agreement may be executed in any
number of counterparts (including by facsimile), each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

SECTION 12.         Successors and Assigns.  This Control Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, except that the Grantor may not assign, transfer or delegate any
of its rights or obligations under this Control Agreement without the prior
written consent of the Collateral Agent. 
Additionally, in the event that the Collateral Agent is replaced as
Collateral Agent under the Security Agreement, any entity that succeeds to such
role shall be entitled to the benefits of this Control Agreement.  The Collateral Agent agrees to send written
notice to the Issuer of any such replacement.

 C-3
 

 

SECTION 13.         Governing Law and Jurisdiction.  This Control Agreement has been delivered to
and accepted by the Collateral Agent and will be deemed to be made in the State
of New York.  THIS CONTROL
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.  Each of the parties hereto submits for itself
and its property in any legal action or proceeding relating to this Control
Agreement, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof.

SECTION 14.         WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS CONTROL AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

SECTION 15.         Subordination.  The security interests securing the
indebtedness and other obligations under the Indenture, the Notes and the Note
Guarantees (each as defined in the Indenture) will be subordinated to the
security interests securing any future indebtedness and other obligations under
a certain senior secured Working Capital Facility (as defined in the Indenture)
that Grantor may enter into after the date of the Indenture.  A copy of the form of Intercreditor Agreement
(as defined in the Indenture) governing such subordination is available from
Grantor upon written request.

 C-4
 

 

IN WITNESS WHEREOF, each of the undersigned has caused
this Control Agreement to be duly executed and delivered as of the date first
above written.

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO
  BANK, NATIONAL

  
	
   

  	
  ASSOCIATION, as
  Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name: Patrick T.
  Giordano

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  [NAME OF ISSUER]

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 C-5
 

 

Exhibit A

[NAME OF COLLATERAL
AGENT]

[ADDRESS OF COLLATERAL AGENT]

	
  

  	
  [Date]

  

 

[Name and Address of Issuer]

Attention:                     

Re:              Termination
of Control Agreement dated                      ,

among [Grantor], [Issuer] and [Collateral Agent

You are hereby notified that the Control Agreement
between you, the Grantor and the undersigned (if available, a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Control Agreement. 
Notwithstanding any previous instructions to you, you are hereby
instructed to comply with the instructions or directions of any kind originated
by the Grantor with respect to the Collateral. 
This notice terminates any obligations you may have to the undersigned
with respect to the Collateral; however, nothing contained in this notice shall
alter any obligations you may otherwise owe to the Grantor pursuant to any
other agreement.

You are instructed to deliver a copy of this notice by
facsimile transmission to [insert name of Grantor].

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO
  BANK, NATIONAL ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

cc: [Insert name of Grantor]

 C-6

Exhibit D to

Pledge and Security Agreement

FORM OF CONTROL AGREEMENT

This CONTROL AGREEMENT
(as amended, amended and restated, supplemented, replaced or otherwise modified
from time to time, the “Control Agreement”), dated as of [                        ],
200[   ], among                                    
(the “Grantor”),                       
in its capacity as a “securities intermediary” (as defined in Section 8-102 of
the UCC) and a “bank” (as defined in Section 9-102 of the UCC) (in such
capacities, the “Financial Institution”), and Wells Fargo Bank, National
Association, as collateral agent under the Security Agreement (as defined
below) for and on behalf of the Secured Parties (as defined therein) (together
with its successors and assigns in such capacity, the “Collateral Agent”).  All references herein to the “UCC” shall mean
the Uniform Commercial Code as from time to time in effect in the State of New
York.

 

WHEREAS, [the Grantor], [                            ],
[                            ]  and Wells Fargo Bank, National Association,
in its capacity as trustee on behalf of the holders of the notes issued from
time to time thereunder, have entered into that certain Indenture, dated as of
November 9, 2006 (as amended, amended and restated, supplemented, replaced or
otherwise modified from time to time, the “Indenture”);

WHEREAS, the Grantor has granted to the Collateral
Agent, for the benefit of the Secured Parties, a security interest in the
Pledged Accounts (as hereinafter defined) pursuant to that certain Pledge and
Security Agreement, dated as of November 9, 2006 (as amended, amended and
restated, supplemented, replaced or otherwise modified from time to time, the “Security
Agreement”), among the Grantor and the other persons party thereto as grantors
in favor of the Collateral Agent; and

WHEREAS, the parties hereto are entering into this
Control Agreement to perfect and ensure the priority of such security interest.

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

SECTION 1.           Establishment and Maintenance of
Collateral Accounts.

(a)           The Financial Institution hereby
represents and warrants that it has established and currently maintains the
accounts listed on Schedule 1 hereto and that the Grantor is its sole
customer or entitlement holder with respect to each such account.  Each such account and any successor account
and all other accounts which the Grantor now or hereafter maintains with the
Financial Institution, shall be referred to herein individually as a “Pledged
Account” and collectively as the “Pledged Accounts.”  The Financial Institution covenants and
agrees that it shall not change the name or account number of any Pledged
Account without the prior written consent of the Collateral Agent.

(b)           Each of the parties hereto
acknowledges and agrees that the accounts listed on Part A of Schedule 1
hereto are “deposit accounts” (within the meaning of 

 D-1
 

Section 9-102(a)(29) of the UCC) and the accounts
listed on Part B of Schedule 1 hereto are “securities accounts” (within
the meaning of Section 8-501 of the UCC). 
As used herein “Deposit Account” shall mean any Pledged Account (or any
part thereof) which is determined to be a “deposit account” (within the meaning
of Section 9-102(a)(29) of the UCC) and “Securities Account” shall mean any
Pledged Account (or any part thereof) which is determined to be a “securities
account” (within the meaning of Section 8-501 of the UCC).

(c)           The Financial Institution covenants
and agrees that:  (i) all securities or
other property underlying any financial assets credited to any Securities
Account shall be registered in the name of the Financial Institution, indorsed
to the Financial Institution or indorsed in blank or credited to another
securities account maintained in the name of the Financial Institution and in
no case will any financial asset credited to any Securities Account be
registered in the name of the Grantor, payable to the order of the Grantor or
specially indorsed to the Grantor except to the extent the foregoing have been
specially indorsed to the Financial Institution or in blank; and (ii) all
property delivered to the Financial Institution pursuant to the Security
Agreement will be promptly credited to one of the Pledged Accounts.

SECTION 2.           “Financial Assets” Election.  The Financial Institution hereby agrees that
each item of property (including, without limitation, all investment property,
financial assets, securities, instruments or cash) credited to any Pledged
Account that is a Securities Account shall be treated as a “financial asset”  within the meaning of Section 8-102(a)(9) of
the UCC.

SECTION 3.           Control of the Pledged Accounts.  If at any time the Financial Institution
shall receive from the Collateral Agent an entitlement order (i.e. an order
directing transfer or redemption of any financial asset relating to a Pledged
Account) or any instruction directing disposition of funds in a Pledged Account
originated by the Collateral Agent, the Financial Institution shall comply with
such entitlement order or instruction without further consent by the Grantor or
any other person.  The Grantor is
entitled to give entitlement orders and instructions with respect to the
Pledged Accounts, subject to Section 4 hereof, provided, that if such
entitlement orders or instructions conflict with instructions of the Collateral
Agent, the Financial Institution shall comply with the entitlement orders and
instructions issued by the Collateral Agent. 
The intent of the foregoing is to perfect the security interest of the
Collateral Agent for the benefit of the Securities Parties granted pursuant to
the Security Agreement.

SECTION 4.           Grantor’s Access to the Account.  If at any time the Collateral Agent delivers
to the Financial Institution a Notice of Sole Control in substantially the form
set forth in Exhibit A hereto, the Financial Institution agrees that,
after receipt of such notice, it will take all directions with respect to the
Pledged Accounts solely from the Collateral Agent and shall not comply with
instructions or entitlement orders of the Grantor or any other person (unless
and until the Collateral Agent instructs otherwise).

SECTION 5.           Subordination of Lien; Waiver of
Set-Off.  In the event that the
Financial Institution has or subsequently obtains by agreement, by operation of
law or otherwise a security interest in any Pledged Account or any financial
assets, cash or other property credited thereto, the Financial Institution
hereby agrees that such security interest shall be subordinate to the security
interest of the Collateral Agent perfected hereby.  The financial assets, money and

 D-2
 

other items credited to any Pledged Account will not
be subject to deduction, set-off, banker’s lien, or any other right in favor of
any person other than the Collateral Agent (except that the Financial
Institution may set off (i) all amounts due to the Financial Institution in
respect of customary fees and expenses for the routine maintenance and
operation of the respective Pledged Account and (ii) the face amount of any
checks which have been credited to such Pledged Account but are subsequently
returned unpaid because of uncollected or insufficient funds).

SECTION 6.           Choice of Law.  THIS CONTROL AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK. 
Regardless of any provision in any other agreement, for purposes of the
UCC, with respect to each Pledged Account, the State of New York shall be
deemed to be the Financial Institution’s jurisdiction (within the meaning of
Sections 8-110 and 9-304 of the UCC). 
The Pledged Accounts shall be governed by the laws of the State of New
York.

SECTION 7.           Conflict with Other Agreements.  The Financial Institution hereby represents,
warrants, covenants and agrees that:

(a)           There are no other agreements entered
into between the Financial Institution and the Grantor with respect to any
Pledged Account [except for [identify other agreements]] (the “Account
Agreements”).

(b)           It has not entered into, and until
the termination of this Control Agreement will not enter into, any agreement
with any other person relating to the Pledged Accounts and/or any financial
assets credited thereto pursuant to which it has agreed to comply with entitlement
orders of such other person (as defined in Section 8-102(a)(8) of the UCC) or
instructions of such other person directing the disposition of funds (except
any such other agreement with the Grantor under which the obligations of the
Financial Institution are subordinated to the Financial Institution’s
obligations hereunder).

(c)           It has not entered into, and until
the termination of this Control Agreement will not enter into, any agreement
with the Grantor purporting to limit or condition the obligation of the
Financial Institution to comply with entitlement orders or instructions from
the Collateral Agent.

(d)           Except as provided in Section 6
above, in the event of any conflict between this Control Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered
into, the terms of this Control Agreement shall prevail.

SECTION 8.           Adverse Claims.  The Financial Institution represents and
warrants that, except for the claims and interest of the Grantor and the
Collateral Agent in each case as described herein, in the Pledged Accounts, it
does not know of any lien on or claim to, or interest in, any Pledged Account
or in any “financial asset” (as defined in Section 8-102(a) of the UCC)
credited thereto.  If any person asserts
any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the
Pledged Accounts or in any financial asset carried therein, the Financial
Institution will promptly notify the Collateral Agent and the Grantor thereof
upon becoming aware of such assertion.

 D-3
 

SECTION 9.           Additional Provisions Regarding
Maintenance of Accounts.  The
Financial Institution covenants and agrees:

(a)           Statements and Confirmations.  The Financial Institution will promptly send
copies of all statements, confirmations and other correspondence concerning (i)
any Securities Account and/or any financial assets credited thereto and (ii)
any Deposit Account, simultaneously to each of the Grantor and the Collateral Agent
at the address for each set forth in Section 13 of this Control Agreement.

(b)           Tax Reporting.  All items of income, gain, expense and loss
recognized in any Securities Account and all interest, if any, relating to any
Deposit Account, shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the name and taxpayer identification
number of the Grantor.

(c)           Voting Rights.  At any time during which the Grantor is
entitled to give entitlement orders pursuant to Section 3 hereof, the Grantor
shall direct the Financial Institution with respect to the voting of any
financial assets credited to the Pledged Accounts.

(d)           Permitted Investments.  At any time during which the Grantor is
entitled to give entitlement orders pursuant to Section 3 hereof, the Grantor
shall direct the Financial Institution with respect to the selection of
investments to be made for any Pledged Account that is a Securities Account;
provided, however, that the Financial Institution shall not honor any
instruction to purchase any investments other than investments of a type
described as “Cash Equivalents” on Exhibit B hereto.

SECTION 10.         Additional Representation and
Warranty of the Financial Institution. 
The Financial Institution represents and warrants that this Control
Agreement is the legal, valid, binding and enforceable obligation of the
Financial Institution.

SECTION 11.         Indemnification of Financial
Institution.  The Grantor and the
Collateral Agent hereby agree that (a) the Financial Institution is released
from any and all liabilities to the Grantor and the Collateral Agent arising
from the terms of this Control Agreement and the compliance of the Financial
Institution with the terms hereof, except to the extent that such liabilities
arise from the Financial Institution’s gross negligence or willful misconduct
and (b) the Grantor, its successors and assigns shall at all times indemnify
and save harmless the Financial Institution from and against any and all
claims, actions and suits of others arising out of the terms of this Control
Agreement or the compliance of the Financial Institution with the terms hereof,
except to the extent that such arises from the Financial Institution’s
negligence, and from and against any and all liabilities, losses and damages
and reasonable costs, charges, counsel fees and other expenses of every nature
and character arising by reason of the same, until the termination of this
Control Agreement.

SECTION 12.         Successors; Assignment.  The terms of this Control Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors and assigns, except that the neither the
Grantor nor the Financial Institution may assign their obligations hereunder
without the prior written consent of the Collateral Agent.  Additionally, in the event that the
Collateral Agent is replaced as Collateral Agent under the

 D-4
 

Security Agreement, any entity that succeeds to such
role shall be entitled to the benefits of this Control Agreement.  The Collateral Agent agrees to send written
notice to the Financial Institution of any such replacement.

SECTION 13.         Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made on the earlier of delivery, or three days after
being deposited in the mail and sent by first class mail, postage prepaid, or,
in the case of facsimile notice, when received, to the address as set forth
below, or to such other address as any party may give to the others in writing
for such purpose:

	
   

  	
  Financial
  Institution

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of Financial Institution]

  	
   

  
	
   

  	
  [Address
  of Financial Institution]

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Tel:

  	
  (    )     
  -       

  	
   

  
	
   

  	
  Fax:

  	
  (    )     
  -       

  	
   

  

 

	
   

  	
  Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Wells Fargo
  Bank, National Association

  	
   

  
	
   

  	
  [Address
  of Collateral Agent]

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Tel:

  	
  (    )     
  -       

  	
   

  
	
   

  	
  Fax:

  	
  (    )     
  -       

  	
   

  

 

	
   

  	
  With a copy to

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [                                                   ]

  	
   

  
	
   

  	
  [Address]

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Tel:

  	
  (    )     
  -       

  	
   

  
	
   

  	
  Fax:

  	
  (    )     
  -       

  	
   

  

 

	
   

  	
  Grantor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name
  of Grantor]

  	
   

  
	
   

  	
  [Address]

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Tel:

  	
  (    )     
  -       

  	
   

  
	
   

  	
  Fax:

  	
  (    )     
  -       

  	
   

  

 

SECTION 14.         Amendment.  No amendment or modification of this Control
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all of the parties hereto.

 D-5
 

 

SECTION 15.         Termination.  This Control Agreement shall terminate
automatically upon receipt by the Financial Institution of written notice
executed by the Collateral Agent that (i) all of the obligations (excluding
unmatured contingent reimbursement and indemnification obligations) secured by
the Pledged Accounts have been satisfied in accordance with any agreements
applicable thereto, or (ii) the security interest in all of the Pledged
Accounts has been released, whichever is sooner, and the Financial Institution
shall thereafter be relieved of all duties and obligations hereunder.  Upon request by the Grantor, the Collateral
Agent agrees to provide Notice of Termination in substantially the form of Exhibit
C hereto to the Financial Institution upon the termination of this Control
Agreement in accordance with the foregoing. 
The termination of this Control Agreement shall not terminate the
Pledged Accounts or alter the obligations of the Financial Institution to the
Grantor pursuant to any other agreement with respect to the Pledged Accounts.

SECTION 16.         Counterparts.  This Control Agreement may be executed in any
number of counterparts (including by facsimile), all of which shall constitute
one and the same instrument, and any party hereto may execute this Control
Agreement by signing and delivering one or more counterparts.

SECTION 17.         Subordination.  The security interests securing the
indebtedness and other obligations under the Indenture, the Notes and the Note
Guarantees (each as defined in the Indenture) will be subordinated to the
security interests securing any future indebtedness and other obligations under
a certain senior secured Working Capital Facility (as defined in the Indenture)
that Grantor may enter into after the date of the Indenture.  A copy of the form of Intercreditor Agreement
(as defined in the Indenture) governing such subordination is available from
Grantor upon written request.

 D-6
 

 

IN WITNESS WHEREOF, each of the undersigned has caused
this Control Agreement to be duly executed and delivered as of the date first
above written.

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  [NAME OF INSTITUTION SERVING
  AS

  FINANCIAL INSTITUTION]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 D-7
 

 

SCHEDULE 1

Part A  List of Existing Deposit Accounts Subject to
this Control Agreement:

	
  Exact Name of Account

  	
  Account
  Number

  

 

Part B  List of Existing Securities Accounts Subject
to this Control Agreement: 

	
  Exact Name of Account

  	
  Account
  Number

  

 

 D-8
 

 

Exhibit A

[NAME OF COLLATERAL AGENT]

[ADDRESS OF COLLATERAL AGENT]

	
  

  	
  [Date]

  

 

[Name and Address of Financial
Institution]

Attention:                              

Re:  Notice of Sole Control

Ladies and Gentlemen:

As referenced in the Control Agreement, dated                     ,
200  , among [insert name of the Grantor], you and the
undersigned (a copy of which is attached) we hereby give you notice of our sole
control over each of the Pledged Accounts and all financial assets or funds
credited thereto.  You are hereby
instructed not to accept any directions or instructions with respect to the
Pledged Accounts or funds credited thereto from any person other than the
undersigned, unless otherwise ordered by a court of competent jurisdiction or
otherwise directed by us in writing.

You are instructed to deliver a copy of this notice by
facsimile transmission to [insert name of
the Grantor].

	
  

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
  

  	
  WELLS FARGO
  BANK, NATIONAL

  ASSOCIATION, as
  Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

cc:  [Name of Grantor]

 D-9
 

 

Exhibit B

Permitted Investments

“Cash Equivalents” means: (1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality of the United States
government (provided that the full faith and credit of the United States is
pledged in support of those securities) having maturities of not more than
twelve months from the date of acquisition; (3) certificates of deposit and
eurodollar time deposits with maturities of twelve months or less from the date
of acquisition, bankers’ acceptances with maturities not exceeding twelve
months and overnight bank deposits, in each case, with any domestic commercial
bank having capital and surplus in excess of $500.0 million and a Thomson Bank
Watch Rating of “B” or better; (4) repurchase obligations with a term of not
more than seven (7) days for underlying securities of the types described in
clauses (2) and (3) above entered into with any financial institution meeting
the qualifications specified in clause (3) above; (5) commercial paper having
one of the two highest ratings obtainable from Moody’s Investors Service, Inc.
or Standard & Poor’s Rating Group and in each case maturing within twelve
months after the date of acquisition; and (6) money market funds at least 95%
of the assets of which constitute Cash Equivalents of the kinds described in
clauses (1) through (5) of this definition.

 D-10
 

 

Exhibit C

[NAME OF COLLATERAL AGENT]

[ADDRESS OF COLLATERAL AGENT]

	
  

  	
  [Date]

  

 

[Name and Address of Financial
Institution]

Attention:                              

Re:  Termination of Control Agreement dated                         ,

among [Grantor],
[Financial Institution] and [Collateral Agent]

You are hereby notified that the Control Agreement
between you, the Grantor and the undersigned (if available, a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Control Agreement. 
Notwithstanding any previous instructions to you, you are hereby instructed
to accept all future directions with respect to account number(s) _______ from
the Grantor.  This notice terminates any
obligations you may have to the undersigned with respect to such accounts;
however, nothing contained in this notice shall alter any obligations which you
may otherwise owe to the Grantor pursuant to any other agreement.

You are instructed to deliver a copy of this notice by
facsimile transmission to [insert name of Grantor].

	
  

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
  

  	
  WELLS FARGO
  BANK, NATIONAL

  ASSOCIATION, as
  Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

Cc:  [Name of Grantor]

 

 D-11

 

Exhibit E to

Pledge and Security Agreement

FORM OF CONTROL AGREEMENT

This CONTROL AGREEMENT (as amended, amended and
restated, supplemented, replaced or otherwise modified from time to time, the “Control
Agreement”), dated as of [                             ],
200[     ], is made by and among                               ,
a                     
(the “Grantor”),                     ,
a                      
(the “Broker”), and Wells Fargo Bank, National Association, as
collateral agent under the Security Agreement (as defined below) for and on
behalf of the Secured Parties (as defined therein) (together with its
successors and assigns in such capacity, the “Collateral Agent”).

WHEREAS, [the Grantor], [                          ],
[                         ]
and Wells Fargo Bank, National Association, in its capacity as
trustee on behalf of the holders of the notes issued from time to time
thereunder, have entered into that certain Indenture, dated as of November 9,
2006 (as amended, amended and restated, supplemented, replaced or otherwise
modified from time to time, the “Indenture”);

WHEREAS, the Broker maintains for the Grantor a
commodity account, Account No.                        ,
in the name of the Grantor (the “Pledged Account”);

WHEREAS, the Grantor has granted to the Collateral
Agent, for the benefit of the Secured Parties, a security interest in the
Pledged Account, the commodity contracts and any free credit balance carried
therein, and all additions thereto and substitutions and proceeds thereof (collectively,
the “Collateral”) pursuant to that certain Pledge and Security
Agreement, dated as of November 9, 2006 (as amended, amended and restated,
supplemented, replaced or otherwise modified from time to time, the “Security
Agreement”), among the Grantor and the other persons party thereto as
grantors in favor of the Collateral Agent; and

WHEREAS, the following terms, which are defined in
Articles 8 and 9 of the Uniform Commercial Code in effect in the State of New
York on the date hereof (the “UCC”), are used herein as so defined:  commodity account, commodity contract,
commodity intermediary’s jurisdiction, control and proceeds.

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

SECTION 1.           Notice of Security Interest.  The Grantor, the Collateral Agent and the
Broker are entering into this Control Agreement to perfect, and to confirm the
priority of, the Collateral Agent’s security interest in the Collateral.  The Broker acknowledges that this Control
Agreement constitutes written notification to the Broker of the Collateral
Agent’s security interest in the Collateral. 
The Broker agrees to promptly make all necessary entries or notations in
its books and records to reflect the Collateral Agent’s security interest in
the Collateral.  The Broker acknowledges
that the Collateral Agent has control over the Pledged Account and all
commodity contracts and any free credit balance carried therein from time to time.

 E-1
 

 

 

SECTION 2.           Collateral; Pledged Account.  (a) The Grantor hereby represents and
warrants to, and agrees with the Collateral Agent and the Broker that, all
commodity contracts carried by the Broker on its books for the Grantor are and
shall be credited to the Pledged Account.

(a)           The Broker hereby represents and
warrants to, and agrees with the Grantor and the Collateral Agent that, (i) the
Broker is a commodity intermediary with respect to the Grantor and the Pledged
Account is a commodity account, (ii) the commodity intermediary’s jurisdiction
(within the meaning of Section 9-305(b) of the UCC) is, and during the term of
this Control Agreement shall for all purposes of this Control Agreement remain,
the State of New York, (iii) Schedule 1 contains a true and complete
statement of the Pledged Account and the commodity contracts and any free
credit balance carried therein as of the date hereof, and (iv) no commodity
contracts carried in the Pledged Account shall be purchases on margin, and the
Broker will not extend, directly or indirectly, any “purpose credit” (within
the meaning of such term under Regulation T of the Board of Governors of the
Federal Reserve System of the United States) to the Grantor in respect of the
Pledged Account.

(b)           The Collateral Agent hereby instructs
the Broker, and the Broker hereby confirms and agrees that, unless the
Collateral Agent shall otherwise direct the Broker in writing, all commodity
contracts carried by the Broker on its books for the Grantor shall be credited
only to, and carried only in, the Pledged Account.

SECTION 3.           Control.  The Broker hereby agrees, upon written
direction from the Collateral Agent and without further consent from the
Grantor, (a) to apply any value distributed on account of the commodity contracts
carried in the Pledged Account as directed by the Collateral Agent, to
liquidate or otherwise dispose of the Collateral as and to the extent directed
by the Collateral Agent and to pay over to the Collateral Agent all proceeds
and other value therefrom or otherwise distributed with respect thereto without
any setoff or deduction, and (b) except as otherwise directed by the Collateral
Agent, not to apply any value distributed on account of any commodity contract
carried in the Pledged Account as directed by the Grantor or any other person
at any time after the Broker has received written notice from the Collateral
Agent that it is no longer permitted to so apply any value distributed on
account of any commodity contract carried in the Pledged Account (and
thereafter not until such time as the Collateral Agent sends written notice to
the Broker that it is permitted to so apply any value distributed on account of
any commodity contract carried in the Pledged Account).  Until such time as the Broker has received
written notice from the Collateral Agent that it is not permitted to apply any
value distributed on account of the commodity contracts carried in the Pledged
Account as directed by the Grantor, the Grantor shall be entitled to issue
directions concerning the application of any value distributed on account of
any commodity contract carried in the Pledged Account, and the Broker shall
comply with such directions; provided, however, that if and when the Broker
receives conflicting directions from the Grantor and the Collateral Agent, the
Bank shall only follow the directions of the Collateral Agent.  The intent of the foregoing is to perfect the
security interest of the Collateral Agent for the benefit of the Secured
Parties granted pursuant to the Security Agreement.

SECTION 4.           Other Agreements; Termination;
Successor Brokers.  The Broker shall
simultaneously send to the Collateral Agent copies of all notices given and
statements

 E-2
 

 

rendered to the Grantor with respect to the Pledged
Account.  The Broker shall notify
promptly the Collateral Agent and the Grantor if any other person asserts any
lien, encumbrance, claim or security interest in or against any of the
Collateral.  As long as this Control
Agreement remains in effect, neither the Grantor nor the Broker shall terminate
the Pledged Account without thirty (30) days’ prior written notice to the other
party and the Collateral Agent.  Except
as provided in Section 4 above, in the event of any conflict between the
provisions of this Control Agreement and any other agreement governing any
Collateral, the provisions of this Control Agreement shall control.  In the event the Broker no longer serves as
Broker for the Collateral, the Pledged Account, the commodity contracts and any
free credit balance carried therein shall be transferred to a successor broker,
custodian or futures commission merchant satisfactory to the Collateral Agent,
provided, that prior to such transfer, such successor broker, custodian or
futures commission merchant shall execute an agreement that is substantially in
the form of this Control Agreement or is otherwise in form and substance
satisfactory to the Collateral Agent.

SECTION 5.           Protection of Broker.  The Broker may rely and shall be protected in
acting upon any notice, instruction or other communication that it reasonably
believes to be genuine and authorized.

SECTION 6.           Termination.  This Control Agreement shall terminate
automatically upon receipt by the Broker of written notice executed by the
Collateral Agent that (i) all of the obligations (excluding unmatured
contingent reimbursement and indemnification obligations) secured by the
Collateral have been satisfied in accordance with any agreements applicable
thereto, or (ii) the security interest in all of the Collateral has been released,
whichever is sooner, and the Broker shall thereafter be relieved of all duties
and obligations hereunder.  Upon request
by the Grantor, the Collateral Agent agrees to provide a Notice of Termination
in substantially the form of Exhibit A hereto to the Broker upon the
termination of this Control Agreement in accordance with the foregoing.

SECTION 7.           Waiver; Priority of Collateral
Agent’s Interests.  Other than with
respect to its fees and customary commissions with respect to the Pledged
Account, the Broker hereby waives its right to set off any obligations of the
Grantor to the Broker against any or all of the Collateral, and hereby agrees
that any and all liens, encumbrances, claims or security interests which the
Broker may have against the Collateral, either now or in the future in
connection with the Pledged Account are and shall be subordinate and junior to
the prior payment in full in immediately available funds of all obligations of
the Grantor now or hereafter existing under the Indenture, the Security
Agreement and all other documents related thereto, whether for principal,
interest (whether or not such interest accrues after the filing of such
petition for purposes of the federal Bankruptcy Code or is an allowed claim in
such proceeding), indemnities, fees, premiums, expenses or otherwise. Except
for the foregoing and claims and interests of the Grantor and the Collateral
Agent as described herein in the Collateral, the Broker does not know of any
claim to or security interest or other interest in the Collateral.

SECTION 8.           Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made on the earlier of delivery, or three days after
being deposited in the mail and sent by first-class mail, postage prepaid, or,
in the case of facsimile notice, when received, to the Grantor’s, the

 E-3
 

 

Collateral Agent’s and the Broker’s address as set
forth below, or to such other address as any party may give to the others in
writing for such purpose:

	
   

  	
  Broker

  	
   

  
	
   

  	
  [Name
  of Broker]

  	
   

  
	
   

  	
  [Address
  of Broker]

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Tel:

  	
  (    )     
  -       

  	
   

  
	
   

  	
  Fax:

  	
  (    )     
  -       

  	
   

  

 

	
   

  	
  Collateral Agent

  	
   

  
	
   

  	
  Wells Fargo
  Bank, National Association

  	
   

  
	
   

  	
  [Address
  of Collateral Agent]

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Tel:

  	
  (    )     
  -       

  	
   

  
	
   

  	
  Fax:

  	
  (    )     
  -       

  	
   

  

 

	
   

  	
  With a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [                                       ]

  	
   

  
	
   

  	
  [Address]

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Tel:

  	
  (    )     
  -       

  	
   

  
	
   

  	
  Fax:

  	
  (    )     
  -       

  	
   

  

 

	
   

  	
  Grantor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name
  of Grantor]

  	
   

  
	
   

  	
  [Address]

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Tel:

  	
  (    )     
  -       

  	
   

  
	
   

  	
  Fax:

  	
  (    )     
  -       

  	
   

  

 

SECTION 9.           Amendments in Writing.  None of the terms or provisions of this
Control Agreement may be waived, amended, amended and restated, supplemented,
replaced or otherwise modified except by a written instrument executed by the
parties hereto.

SECTION 10.         Entire Agreement.  This Control Agreement and the Security
Agreement constitute the entire agreement and supersede all other prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter hereof.

SECTION 11.         Execution in Counterparts.  This Control Agreement may be executed in any
number of counterparts (including by facsimile), each of which when so

 E-4
 

 

executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.

SECTION 12.         Successors and Assigns.  This Control Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, except that the Grantor may not assign, transfer or delegate any
of its rights or obligations under this Control Agreement without the prior
written consent of the Collateral Agent. 
Additionally, in the event that the Collateral Agent is replaced as
Collateral Agent under the Security Agreement, any entity that succeeds to such
role shall be entitled to the benefits of this Control Agreement.  The Collateral Agent agrees to send written
notice to the Broker of any such replacement.

SECTION 13.         Governing Law and Jurisdiction.  THIS CONTROL AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK. 
Each of the parties hereto submits for itself and its property in any
legal action or proceeding relating to this Control Agreement, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof. 
The Broker’s jurisdiction for purposes of the Uniform Commercial Code,
including Section 9-305 thereof, shall be the State of New York.

SECTION 14.         WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS CONTROL AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.

SECTION 15.         Subordination.  The security interests securing the
indebtedness and other obligations under the Indenture, the Notes and the Note
Guarantees (each as defined in the Indenture) will be subordinated to the
security interests securing any future indebtedness and other obligations under
a certain senior secured Working Capital Facility (as defined in the Indenture)
that Grantor may enter into after the date of the Indenture.  A copy of the form of Intercreditor Agreement
(as defined in the Indenture) governing such subordination is available from
Grantor upon written request.

 E-5
 

 

 

IN WITNESS WHEREOF, each of the undersigned has caused
this Control Agreement to be duly executed and delivered as of the date first
above written.

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
  

  	
  [NAME OF BROKER]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 E-6
 

 

 

Exhibit A

[NAME OF COLLATERAL AGENT]

[ADDRESS OF COLLATERAL AGENT]

[Date]

[Name and Address of Financial
Institution]

Attention:                  

Re:  Termination of Control Agreement dated                      ,

among [Grantor], [Broker]
and [Collateral Agent]

You are hereby notified that the Control Agreement
between you, the Grantor and the undersigned (if available, a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Control Agreement. 
Notwithstanding any previous instructions to you, you are hereby
instructed to accept all future directions with respect to the Pledged Account
from the Grantor.  This notice terminates
any obligations you may have to the undersigned with respect to the Pledged
Account; however, nothing contained in this notice shall alter any obligations
which you may otherwise owe to the Grantor pursuant to any other agreement.

You are instructed to deliver a copy of this notice by
facsimile transmission to [insert name of Grantor].

	
  

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
  

  	
  WELLS FARGO
  BANK, NATIONAL

  ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

cc:  [Insert
name of Grantor]

 E-7

Annex 1 to

Pledge and Security Agreement

 

This ASSUMPTION AGREEMENT, dated as of ____________,
200__, is made by ______________________, a _______________ (the “Additional
Grantor”), in favor of Wells Fargo Bank, National Association, as
collateral agent under the Security Agreement (as defined below) for and on
behalf of the other Secured Parties (as defined therein) (together with its
successors and assigns in such capacity, the “Collateral Agent”).  All capitalized terms used but not otherwise
defined herein shall have the meaning ascribed to them in the Security
Agreement

RECITALS:

WHEREAS,

FiberTower Corporation, a Delaware corporation,
FiberTower Network Services Corp, a Delaware corporation, Art Leasing, Inc., a
Delaware corporation, Teligent Services Acquisition, Inc., a Delaware
corporation, Art Licensing Corporation, a Delaware corporation and FiberTower
Solutions Corporation, a Delaware corporation, and certain of their Affiliates
(other than the Additional Grantor) have entered into that certain Pledge and
Security Agreement, dated as of November 9, 2006 (as amended, amended and
restated, supplemented, replaced or otherwise modified from time to time, the “Security
Agreement”) in favor of the Collateral Agent for the benefit of the Secured
Parties;

WHEREAS, the agreements, documents and instruments
related to the Secured Obligations secured by the Security Agreement require
the Additional Grantor to become a party to the Security Agreement; and

WHEREAS, the Additional Grantor has agreed to execute
and deliver this Assumption Agreement in order to become a party to the
Security Agreement;

NOW, THEREFORE, IT IS AGREED:

1.             Security Agreement.  By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 7.15 of the Security
Agreement, hereby becomes a party to the Security Agreement as a Grantor
thereunder with the same force and effect as if originally named therein as a
Grantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Grantor thereunder.  The information set forth in Annex 1-A hereto
is hereby added to the information set forth in Schedules _____________ to the
Security Agreement.  The Additional
Grantor hereby represents and warrants that each of the representations and
warranties contained in Section 3 of the Security Agreement is true and correct
on and as of the date hereof (after giving effect to this Assumption Agreement)
as if made by such Additional Grantor on and as of such date.

2.             Grant of Security Interest.  The Additional Grantor hereby grants to the
Collateral Agent a security interest in all of the personal property of such
Additional Grantor, including, without limitation, the property described in
Section 2.1 of the Security Agreement, in each case, wherever located and now
owned or at any time hereafter acquired by such Additional

 
  

Grantor or in which such Additional Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, and together with the Collateral under the Security Agreement,
the “Collateral”), as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Secured Obligations. 
Notwithstanding anything to the contrary in this Assumption Agreement,
the term “Collateral” shall not include any of the Excluded Collateral.

3.             GOVERNING LAW.  THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.

 2
  
 

 
  

IN WITNESS WHEREOF, the undersigned has caused this
Assumption Agreement to be duly executed and delivered as of the date first
above written.

	
   

  	
  [ADDITIONAL GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 3Exhibit 10.1

November
13, 2006

	
  To:

  	
   

  	
  Earthlink, Inc.

  
	
   

  	
   

  	
  1375 Peachtree St.

  
	
   

  	
   

  	
  Atlanta, Georgia 30309

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  Telephone: (404) 748-6634

  
	
   

  	
   

  	
  Facsimile: (404) 892-7616

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  UBS AG, London Branch

  
	
   

  	
   

  	
  c/o UBS Securities LLC

  
	
   

  	
   

  	
  299 Park Avenue

  
	
   

  	
   

  	
  New York, NY 10171

  
	
   

  	
   

  	
  Attn: Adam Frieman

  
	
   

  	
   

  	
  Telephone: (212) 821-2100

  
	
   

  	
   

  	
  Facsimile: (212) 821-4610

  

 

Re:                                                                             Convertible
Bond Hedge Transaction

                                                                                                (UBS Reference Number:__________________)      

Ladies and Gentlemen:

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of
the above-referenced transaction entered into on the Trade Date specified below
(the “Transaction”) between UBS AG, London
Branch (“Dealer”) represented by UBS Securities
LLC (“Agent”) as its agent, and
Earthlink, Inc. (“Counterparty”).  This communication constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. 

1. This Confirmation is subject to, and incorporates,
the definitions and provisions of the 2000 ISDA Definitions (including the
Annex thereto) (the “2000 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”,
and together with the 2000 Definitions, the “Definitions”),
in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”).  In the event of any inconsistency between the
2000 Definitions and the Equity Definitions, the Equity Definitions will
govern.  Certain defined terms used
herein have the meanings assigned to them in the indenture to be dated as of November
17, 2006 between Counterparty and Wells Fargo Bank, N.A., as trustee (the “Trustee”) relating to the USD 225,000,000 principal amount
of 3.25% Convertible Notes due November 15, 2026 (the “Convertible Notes”).  In the event of any inconsistency between the
terms defined in the Indenture and this Confirmation, this Confirmation shall
govern.  For the avoidance of doubt,
references herein to sections of the “Indenture” are based on the draft of such
Indenture, to be dated as of November 17, 2006, between Counterparty and the
Trustee, (the “Indenture”) most
recently reviewed by the parties at the time of execution of this Confirmation.
If any relevant sections of the Indenture are changed, added or renumbered
following execution of this Confirmation, the parties will amend this
Confirmation in good faith to preserve the economic intent of the parties.

Each party is hereby advised, and each such party acknowledges,
that the other party has engaged in, or refrained from engaging in, substantial
financial transactions and has taken other material actions in reliance upon
the parties’ entry into the Transaction to which this Confirmation relates on
the terms and conditions set forth below.

This Confirmation evidences a complete and binding agreement
between Dealer and Counterparty as to the terms of the Transaction to which
this Confirmation relates.  This
Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 2002 ISDA Master Agreement (the
“ISDA Form”) as if Dealer and
Counterparty had executed an agreement in such form (without any Schedule but
with the elections set forth in this Confirmation).  For the avoidance of doubt, the Transaction
shall be the only transaction under the Agreement.

All provisions contained in, or incorporated by
reference to, the Agreement will govern this Confirmation except as expressly
modified herein.  In the event of any
inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern. 

 

 

2. The Transaction constitutes a Share Option
Transaction for purposes of the Equity Definitions.  The terms of the particular Transaction to
which this Confirmation relates are as follows:

General Terms:

	
  Trade Date:

  	
   

  	
  November 13, 2006

  
	
   

  	
   

  	
   

  
	
  Effective Date:

  	
   

  	
  November 17, 2006, subject to Section 8(m)

  
	
   

  	
   

  	
   

  
	
  Option Style:

  	
   

  	
  Modified American, as described under “Procedures
  for Exercise” below.

  
	
   

  	
   

  	
   

  
	
  Option Type:

  	
   

  	
  Call

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  Dealer

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
   

  	
  Counterparty

  
	
   

  	
   

  	
   

  
	
  Shares:

  	
   

  	
  The Common Stock of Counterparty, par value
  USD 0.01 per share (Ticker Symbol: “ELNK”).

  
	
   

  	
   

  	
   

  
	
  Number of
  Options:

  	
   

  	
  The number of Convertible Notes in denominations of
  USD1,000 principal amount issued by Counterparty on the closing date for the
  initial issuance of the Convertible Notes; provided
  that the Number of Options shall be increased as of the date of exercise by
  UBS Securities LLC and Banc of America Securities LLC, of its option pursuant
  to Section 3 of the Underwriting Agreement dated as of November 13, 2006
  among Counterparty, UBS Securities LLC and Banc of America Securities LLC
  (the “Underwriting Agreement”) by the number of Convertible Notes in
  denominations of USD1,000 principal amount issued pursuant to such exercise
  (such Convertible Notes, the “Additional
  Convertible Notes”), subject to agreement by the parties hereto on
  the amount of additional Premium payable by Buyer to Seller in respect
  thereof. For the avoidance of doubt, the Number of Options outstanding shall
  be reduced by each exercise of Options hereunder.

  
	
   

  	
   

  	
   

  
	
  Option
  Entitlement:

  	
   

  	
  As of any date, a number of Shares per Option equal
  to the Conversion Rate (as defined in the Indenture, but without regard to any
  adjustments to the Conversion Rate pursuant to Section
  10.05(f), Section 10.08, Section 10.14(a) or Section 10.14(b) of the
  Indenture and without regard to any election by Counterparty to adjust the
  Conversion Rate and the conversion obligation pursuant to Section 10.14(e) of
  the Indenture).

  
	
   

  	
   

  	
   

  
	
  Strike Price:

  	
   

  	
  As of any date, an amount in USD, rounded to the
  nearest cent (with 0.5 cents being rounded upwards), equal to USD1,000 divided by the Option Entitlement.

  
	
   

  	
   

  	
   

  
	
  Applicable
  Percentage:

  	
   

  	
  67%

  
	
   

  	
   

  	
   

  
	
  Number of
  Shares:

  	
   

  	
  The product of the Number of Options and the Option
  Entitlement and the Applicable Percentage.

  
	
   

  	
   

  	
   

  
	
  Premium:

  	
   

  	
  USD 26,908,875(Premium per Option USD 178.50); provided that if the Number of Options is increased
  pursuant to the proviso to the definition of “Number of Options” above, an
  additional Premium in an amount as agreed to by the parties shall be paid on
  the Additional Premium Payment

  

 2
 

 

 

	
  

  	
   

  	
  Date.

  
	
   

  	
   

  	
   

  
	
  Premium Payment
  Date:

  	
   

  	
  The Effective Date

  
	
   

  	
   

  	
   

  
	
  Additional Premium
  Payment Date:

  	
   

  	
  The closing date for the purchase and sale of the
  Additional Convertible Notes.

  
	
   

  	
   

  	
   

  
	
  Exchange:

  	
   

  	
  NASDAQ Global Select Market

  
	
   

  	
   

  	
   

  
	
  Related
  Exchange:

  	
   

  	
  All Exchanges

  
	
   

  	
   

  	
   

  
	
  Procedures for Exercise:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Potential
  Exercise Dates:

  	
   

  	
  Each Conversion Date.

  
	
   

  	
   

  	
   

  
	
  Conversion Date:

  	
   

  	
  Each “Conversion Date”, as defined in the Indenture,
  of Convertible Notes (such Convertible Notes, the “Relevant Convertible Notes” for such Conversion Date)
  occurring on or prior to the Expiration Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If the principal amount of Relevant Convertible
  Notes for any Conversion Date is less than the aggregate principal amount of
  Convertible Notes then outstanding, then the terms of the Transaction shall
  continue to apply, subject to the provisions of this Confirmation, with
  respect to the remaining outstanding principal amount of the Convertible
  Notes.

  
	
   

  	
   

  	
   

  
	
  Required Exercise on Conversion
  Dates:

  	
   

  	
  On each Conversion Date for Relevant Convertible
  Notes, a number of Options equal to the number of Relevant Convertible Notes
  in denominations of USD1,000 principal amount submitted for conversion on
  such Conversion Date in accordance with the terms of the Indenture shall be
  automatically exercised, subject to “Notice of Exercise” below.

  
	
   

  	
   

  	
   

  
	
  Exercise Period:

  	
   

  	
  The period from and excluding the Trade Date to and
  including the Expiration Date.

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  The earlier of (x) last day on which any Convertible
  Notes remain outstanding and (y) November 15, 2011.

  
	
   

  	
   

  	
   

  
	
  Multiple
  Exercise:

  	
   

  	
  Applicable, as provided above under “Required
  Exercise on Conversion Dates”.

  
	
   

  	
   

  	
   

  
	
  Minimum Number
  of Options:

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Maximum Number
  of Options:

  	
   

  	
  Number of Options

  
	
   

  	
   

  	
   

  
	
  Integral
  Multiple:

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
   

  
	
  Automatic
  Exercise:

  	
   

  	
  As provided above under “Required Exercise on
  Conversion Dates”.

  
	
   

  	
   

  	
   

  
	
  Notice of
  Exercise:

  	
   

  	
  Notwithstanding anything to the contrary in the
  Equity Definitions, in order to exercise any Options, Counterparty must
  notify Dealer in writing prior to 5:00 PM, New York City time, on the
  Exchange Business Day prior to the first Trading Day (as such term is defined
  in the Indenture) of the “Cash Settlement Averaging Period”, as defined in
  the Indenture, relating to the Relevant Convertible Notes converted on the
  Conversion Date relating to the relevant Exercise Date (the “Notice Deadline”) of (i) the number of Options being
  exercised on such Exercise Date; (ii) the

  

 3
 

 

 

	
  

  	
   

  	
  scheduled settlement date under the Indenture for
  the Relevant Convertible Notes converted on the Conversion Date corresponding
  to such Exercise Date and (iii) the “Cash Percentage,” as defined in the
  Indenture, for the Relevant Convertible Notes converted on the Conversion
  Date corresponding to such Exercise Date; provided
  that, notwithstanding the foregoing, such notice (and the related exercise of
  Options) shall be effective if given after the Notice Deadline, but prior to
  5:00 PM New York City time, on the fifth Exchange Business Day of such “Cash
  Settlement Averaging Period”, in which event the Calculation Agent shall have
  the right to adjust the Delivery Obligation as appropriate to reflect the
  additional costs (including, but not limited to, hedging mismatches and
  market losses) and expenses incurred by Dealer in connection with its hedging
  activities (including the unwinding of any hedge position) as a result of
  Dealer not having received such notice prior to the Notice Deadline.

  
	
   

  	
   

  	
   

  
	
  Dealer’s Telephone
  Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving
  Notice:

  	
   

  	
  To: UBS AG, London Branch

  
	
   

  	
   

  	
  c/o UBS Securities LLC

  
	
   

  	
   

  	
  299 Park Avenue

  
	
   

  	
   

  	
  New York, NY 10171

  
	
   

  	
   

  	
  Attn: Adam Frieman

  
	
   

  	
   

  	
  Telephone: (212) 821-2100

  
	
   

  	
   

  	
  Facsimile: (212) 821-4610

  
	
  Settlement Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Settlement Date:

  	
   

  	
  In respect of an Exercise Date occurring on a
  Conversion Date, the settlement date for the Shares, cash or a combination
  thereof to be delivered in respect of the Relevant Convertible Notes under
  the terms of the Indenture; provided that
  the Settlement Date will not be prior to the later of (i) the date one
  Settlement Cycle following the final day of the “Cash Settlement Averaging
  Period”, as defined in the Indenture, or (ii) the Exchange Business Day
  immediately following the date on which Counterparty gives notice to Dealer
  of such Settlement Date prior to 5:00 PM, New York City time.

  
	
   

  	
   

  	
   

  
	
  Delivery
  Obligation:

  	
   

  	
  In lieu of the obligations set forth in Sections 8.1
  and 9.1 of the Equity Definitions, and subject to “Notice of Exercise” above,
  in respect of an Exercise Date occurring on a Conversion Date, Dealer will
  deliver to Counterparty, on the related Settlement Date, the product of the
  Applicable Percentage and a number of Shares, an amount of cash or a
  combination thereof equal or in an amount equal to, as the case may be, the
  aggregate number of Shares, the aggregate amount of cash or combination
  thereof representing the sum of the Daily Share Amounts (as such term is
  defined in the Indenture) for each Trading Day (as such term is defined in
  the Indenture) in the Cash Settlement Averaging Period that Counterparty is
  obligated to deliver to the holder(s) of the Relevant Convertible Notes
  converted on such Conversion Date pursuant to Section 10.02(a) or Section
  10.02(h), as the case may be, of the Indenture (the “Convertible Obligation”);

  

 4
 

 

 

	
  

  	
   

  	
  provided that
  such obligation shall be determined (x) excluding any Shares, cash or a
  combination thereof that Counterparty is obligated to deliver to holder(s) of
  the Relevant Convertible Notes as a result of any adjustments to the
  Conversion Rate pursuant to Section 10.05(f), Section 10.08, Section 10.14(a)
  or Section 10.14(b) of the Indenture and (y) without regard to any election
  by Counterparty to adjust the Conversion Rate and the conversion obligation
  pursuant to Section 10.14(e) of the Indenture. For the avoidance of doubt,
  the Convertible Obligation shall not include the Daily Principal Amount for
  any Trading Day in the relevant Cash Settlement Averaging Period.

  
	
   

  	
   

  	
   

  
	
  Other Applicable
  Provisions:

  	
   

  	
  To the extent Dealer is obligated to deliver Shares
  hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12
  of the Equity Definitions will be applicable, except that all references in
  such provisions to “Physically-Settled” shall be read as references to “Net
  Share Settled”; and provided
  that the Representation and Agreement contained in Section 9.11 of the Equity
  Definitions shall be modified by excluding any representations therein
  relating to restrictions, obligations, limitations or requirements under
  applicable securities laws as a result of the fact that “Buyer” is the issuer
  of the Shares.

  
	
   

  	
   

  	
   

  
	
  Restricted
  Certificated Shares:

  	
   

  	
  Notwithstanding anything to the contrary in the
  Equity Definitions, Dealer may, in whole or in part, deliver Shares in
  certificated form representing the Number of Shares to be Delivered to
  Counterparty in lieu of delivery through the Clearance System.

  
	
   

  	
   

  	
   

  
	
  Adjustments:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Method of
  Adjustment:

  	
   

  	
  Notwithstanding Section 11.2 of the Equity
  Definitions, upon the occurrence of any event or condition set forth in
  Section 10.05(a), Section 10.05(b), Section 10.05(c) or Section 10.05(d) of
  the Indenture, the Calculation Agent shall make the corresponding adjustment
  in respect of any one or more of the Number of Options, the Option
  Entitlement and any other variable relevant to the exercise, settlement or
  payment of the Transaction, to the extent an analogous adjustment is made
  under the Indenture.

  
	
   

  	
   

  	
   

  
	
  Extraordinary
  Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Merger Events:

  	
   

  	
  Notwithstanding Section 12.1(b) of the Equity
  Definitions, a “Merger Event” means the occurrence of any event or condition
  set forth in clause (i), clause (ii) or clause (iii) of the first paragraph
  Section 10.11 of the Indenture.

  
	
   

  	
   

  	
   

  
	
  Tender Offer:

  	
   

  	
  Applicable. Notwithstanding Section 12.1(d) of the
  Equity Definitions, a “Tender Offer” means the occurrence of any event or
  condition set forth in Section 10.05(e) of the Indenture.

  
	
   

  	
   

  	
   

  
	
  Consequences of Merger
  Events and Tender Offers:

  	
   

  	
  Notwithstanding Sections 12.2 and 12.3 of the Equity
  Definitions, upon the occurrence of a Merger Event or Tender Offer, the
  Calculation Agent shall make the corresponding adjustment in respect of any
  adjustment under the Indenture to any one or more of the nature of the
  Shares, the Number of

  

 5
 

 

 

	
  

  	
   

  	
  Options, the Option Entitlement and any other
  variable relevant to the exercise, settlement or payment for the Transaction,
  to the extent an analogous adjustment is made under the Indenture; provided that
  such adjustment shall be made (x) without regard to
  any adjustment to the Conversion Rate for the issuance of additional shares
  as set forth in Section 10.14(a) or Section 10.14(b) of the Indenture and (y)
  without regard to any election by Counterparty to adjust the Conversion Rate
  and the conversion obligation pursuant to Section 10.14(e) of the Indenture;
  and provided further that the
  Calculation Agent may limit or alter any such adjustment referenced in this
  paragraph so that the fair value of the Transaction to the Dealer is not
  reduced as a result of such adjustment.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Nationalization,
  Insolvency or Delisting:

  	
   

  	
  Cancellation and Payment (Calculation Agent
  Determination); provided that
  in addition to the provisions of Section 12.6(a)(iii) of the Equity
  Definitions, it will also constitute a Delisting if the Exchange is located
  in the United States and the Shares are not immediately re-listed, re-traded
  or re-quoted on any of the New York Stock Exchange, the American Stock
  Exchange or the NASDAQ Global Select Market (or their respective successors);
  if the Shares are immediately re-listed, re-traded or re-quoted on any such
  exchange or quotation system, such exchange or quotation system shall
  thereafter be deemed to be the Exchange.

  	
   

  
	
  Additional Disruption Events:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (a) Change in Law:

  	
   

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b) Failure to Deliver:

  	
   

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c) Insolvency Filing:

  	
   

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (d) Hedging Disruption:

  	
   

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (e) Increased Cost of Hedging:

  	
   

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Hedging Party:

  	
   

  	
  For all applicable Additional Disruption Events,
  Dealer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Determining Party:

  	
   

  	
  For all applicable Additional Disruption Events,
  Dealer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Non-Reliance:

  	
   

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Agreements and Acknowledgments 

  	
   

  	
   

  	
   

  
	
  Regarding
  Hedging Activities:

  	
   

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Additional Acknowledgments:

  	
   

  	
  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3. Calculation Agent:

  	
   

  	
  Dealer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4. Account Details:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dealer Payment Instructions:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  UBS AG Stamford

  	
   

  	
   

  	
   

  
	
  SWIFT: UBSWUS33XXX

  	
   

  	
   

  	
   

  
	
  Bank Routing:
  026-007-993

  	
   

  	
   

  	
   

  
	
  Account Name:
  UBS AG, London Branch

  	
   

  
	
  Account No. :
  101-WA-140007-000

  	
   

  

 

 6
 

 

 

Counterparty Payment Instructions:

To be provided by Counterparty.

5.  Offices:

The Office of Dealer for the Transaction is: 

UBS AG

100 Liverpool Street 

London EC2M 2RH

United Kingdom

Telephone:  +44
207 568 0687

Facsimile:  +44
207 568 9895/6

 

The Office of Counterparty for the Transaction is: N/A

For the purpose of
Section 10(c) of the Agreement, neither party is a Multibranch Party. 

6.   Notices: For purposes of this
Confirmation:

(a)           Address
for notices or communications to Issuer:

	
  

  	
  To:

  	
  1375 Peachtree St.

  
	
   

  	
   

  	
  Atlanta, Georgia 30309

  
	
   

  	
  Attn:

  	
  General Counsel

  
	
   

  	
  Telephone:

  	
  (404) 748-6634

  
	
   

  	
  Facsimile:

  	
  (404) 892-7616

  

 

(b)           Address
for notices or communications to Dealer:

	
  

  	
  To:

  	
  UBS AG, London Branch

  
	
   

  	
   

  	
  c/o UBS Securities LLC 

  
	
   

  	
   

  	
  299 Park Avenue

  
	
   

  	
   

  	
  New York, NY 
  10171

  
	
   

  	
  Attn:

  	
  Adam Frieman

  
	
   

  	
  Telephone:

  	
  (212) 821-2100

  
	
   

  	
  Facsimile:

  	
  (212) 821-4610

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  To:

  	
  Equities Legal Department

  
	
   

  	
   

  	
  677 Washington Boulevard

  
	
   

  	
   

  	
  Stamford, CT 
  06901

  
	
   

  	
  Attn:

  	
  David Kelly and Gordon Kiesling

  
	
   

  	
  Telephone:

  	
  (203) 719-0268

  
	
   

  	
  Facsimile:

  	
  (203) 719-5627

  
	
   

  	
   

  	
   

  
	
   

  	
  and:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  To:

  	
  Equities Volatility Trading

  
	
   

  	
   

  	
  677 Washington Boulevard

  
	
   

  	
   

  	
  Stamford, CT 
  06901

  
	
   

  	
  Attn:

  	
  Namuk Cho and Bennett Lieberman

  
	
   

  	
  Telephone:

  	
  (203) 719-7330

  
	
   

  	
  Facsimile:

  	
  (203) 719-7910

  

 

7.  Representations,
Warranties and Agreements:

(a)           In addition to the
representations and warranties in the Agreement and those contained elsewhere herein,
Counterparty represents and warrants to and for the benefit of, and agrees
with, Dealer as follows:

 7
 

 

 

 (i)           On the Trade Date, (A) Counterparty is not aware of any
material nonpublic information regarding Counterparty or the Shares and (B) all
reports and other documents filed by Counterparty with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and Securities Exchange Act of 1934, as
amended (the “Exchange Act”) when considered as
a whole (with the more recent such reports and documents deemed to amend
inconsistent statements contained in any earlier such reports and documents),
do not contain any untrue statement of a material fact or any omission of a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading.

(ii)           On the Trade Date,
neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as
defined in Rule 10b-18 of the Exchange Act (“Rule 10b-18”))
shall directly or indirectly (including, without limitation, by means of any
cash-settled or other derivative instrument) purchase, offer to purchase, place
any bid or limit order that would effect a purchase of, or commence any tender
offer relating to, any Shares (or an equivalent interest, including a unit of
beneficial interest in a trust or limited partnership or a depository share) or
any security convertible into or exchangeable or exercisable for Shares, except
through Dealer.

(iii)          Without limiting
the generality of Section 13.1 of the Equity Definitions, Counterparty
acknowledges that Dealer is not making any representations or warranties with
respect to the treatment of the Transaction under FASB Statements 149 or 150,
EITF Issue No. 00-19 (or any successor issue statements) or under FASB’s
Liabilities & Equity Project.

(iv)          Without limiting the
generality of Section 3(a)(iii) of the Agreement, the Transaction will not
violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

(v)           Prior to the Trade
Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board
of directors authorizing the Transaction and such other certificate or
certificates as Dealer shall reasonably request.

(vi)          Counterparty is not
entering into this Confirmation to create actual or apparent trading activity
in the Shares (or any security convertible into or exchangeable for Shares) or
to raise or depress or otherwise manipulate the price of the Shares (or any
security convertible into or exchangeable for Shares) or otherwise in violation
of the Exchange Act.  

(vii)         Counterparty is not,
and after giving effect to the transactions contemplated hereby will not be, an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended.

(viii)        On the Trade Date (A)
the assets of Counterparty at their fair valuation exceed the liabilities of
Counterparty, including contingent liabilities, (B) the capital of Counterparty
is adequate to conduct the business of Counterparty and (C) Counterparty has
the ability to pay its debts and obligations as such debts mature and does not
intend to, or does not believe that it will, incur debt beyond its ability to
pay as such debts mature.

(ix)           The representations
and warranties of Counterparty set forth in Section 3 of the Agreement and
Section 3 of the Underwriting Agreement are true and correct and are hereby
deemed to be repeated to Dealer as if set forth herein.

(x)            Counterparty
understands that no obligations of Dealer to it hereunder will be entitled to
the benefit of deposit insurance and that such obligations will not be
guaranteed by any affiliate of Dealer or any governmental agency.

(b)           Each of Dealer and
Counterparty agrees and represents that it is an “eligible contract
participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act,
as amended.

(c)           Each of Dealer and
Counterparty acknowledges that the offer and sale of the Transaction to it is
intended to be exempt from registration under the Securities Act by virtue of
Section 4(2) thereof.  Accordingly,
Counterparty represents and warrants to Dealer that (i) it has the financial
ability to bear the economic risk of its investment in the Transaction and is
able to bear a total loss of its investment and its investments in and
liabilities in respect of the Transaction, which it understands are not readily
marketable, are not disproportionate to its net worth, and it is able to bear
any loss in connection with the Transaction, including the loss of its entire
investment in the

 8
 

 

 

Transaction, (ii) it is an “accredited investor” as
that term is defined in Regulation D as promulgated under the Securities Act,
(iii) it is entering into the Transaction for its own account and without a
view to the distribution or resale thereof, (iv) the assignment, transfer or other
disposition of the Transaction has not been and will not be registered under
the Securities Act and is restricted under this Confirmation, the Securities
Act and state securities laws, and (v) its financial condition is such that it
has no need for liquidity with respect to its investment in the Transaction and
no need to dispose of any portion thereof to satisfy any existing or
contemplated undertaking or indebtedness and is capable of assessing the merits
of and understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks of the
Transaction.

(d)           Each of Dealer and
Counterparty agrees and acknowledges (A) that this Confirmation is (i) a
“securities contract,” as such term is defined in Section 741(7) of Title 11 of
the United States Code (the “Bankruptcy Code”),
with respect to which each payment and delivery hereunder is a “settlement
payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and
(ii) a “swap agreement,” as such term is defined in Section 101(53B) of the
Bankruptcy Code, with respect to which each payment and delivery hereunder is a
“transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code,
and (B) that Dealer is entitled to the protections afforded by, among other
sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the
Bankruptcy Code.  

8.  Other
Provisions:

(a)           Right to Extend.  Dealer
may postpone any Potential Exercise Date or any other date of valuation or
delivery by Dealer, with respect to some or all of the relevant Options (in
which event the Calculation Agent shall make appropriate adjustments to the
Delivery Obligation), if Dealer determines, in its reasonable discretion, that
such extension is reasonably necessary to enable Dealer to effect purchases of
Shares in connection with its hedging or settlement activity hereunder in a
manner that would, if Dealer were Counterparty or an affiliated purchaser of
Counterparty, be in compliance with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures
applicable to Dealer.

(b)           Additional Termination Events.  The occurrence of (i) an event of default
with respect to Counterparty under the terms of the Convertible Notes as set
forth in Section 6.01 of the Indenture that results in an acceleration of the
Convertible Notes pursuant to the terms of the Indenture, (ii) an Amendment
Event or (iii) a Repayment Event shall be an Additional Termination Event with
respect to which the Transaction is the sole Affected Transaction and
Counterparty is the sole Affected Party, and Dealer shall be the party entitled
to designate an Early Termination Date pursuant to Section 6(b) of the
Agreement; provided that in the case of a Repayment
Event the Transaction shall be subject to termination only in respect of the
number of Convertible Notes that cease to be outstanding in connection with or
as a result of such Repayment Event.

“Amendment Event”
means that Counterparty amends, modifies, supplements or waives any term of the
Indenture or the Convertible Notes governing the principal amount, coupon,
maturity, repurchase obligation of Counterparty, redemption right of
Counterparty, any term relating to conversion of the Convertible Notes
(including changes to the conversion price, conversion settlement dates or
conversion conditions), or any term that would require consent of the holders
of not less than 100% of the principal amount of the Convertible Notes to
amend, in each case without the prior consent of Dealer, such consent not to be
unreasonably withheld.

“Repayment Event”
means that (A) any Convertible Notes are repurchased (whether in connection
with or as a result of a change of control, howsoever defined, or for any other
reason) by Counterparty or any of its subsidiaries, (B) any Convertible Notes
are delivered to Counterparty in exchange for delivery of any property or
assets of Counterparty or any of its subsidiaries (howsoever described), (C)
any principal of any of the Convertible Notes is repaid prior to the final
maturity date of the Convertible Notes (whether following acceleration of the
Convertible Notes or otherwise), or (D) any Convertible Notes are exchanged by
or for the benefit of the holders thereof for any other securities of
Counterparty or any of its affiliates (or any other property, or any
combination thereof) pursuant to any exchange offer or similar transaction; provided that, in the case of clause (B) and clause (D),
conversions of the Convertible Notes pursuant to the terms of the Indenture as
in effect on the date hereof shall not be Repayment Events. 

(c)           Alternative Calculations and Payment on Early Termination and on
Certain Extraordinary Events. 
If, subject to Section 8(k) below, Dealer shall owe Counterparty any
amount pursuant to Sections 12.6, 12.7

 9
 

 

 

or 12.9 of the Equity
Definitions or pursuant to Section 6(d)(ii) of the Agreement (except in the
event of an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party, that resulted
from an event or events within Counterparty’s control) (a “Payment
Obligation”), Counterparty shall have the right, in its sole
discretion, to require Dealer to satisfy any such Payment Obligation by the
Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading
Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the
Announcement Date or Early Termination Date, as applicable (“Notice of Share Termination”).  Upon such Notice of Share Termination, the
following provisions shall apply on the Scheduled Trading Day immediately
following the Announcement Date or Early Termination Date, as applicable:

	
  Share Termination Alternative:

  	
   

  	
  Applicable and means that Dealer shall deliver to
  Counterparty the Share Termination Delivery Property on the date on which the
  Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of
  the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable
  (the “Share Termination Payment Date”), in
  satisfaction of the Payment Obligation.

  
	
   

  	
   

  	
   

  
	
  Share Termination Delivery

  	
   

  	
   

  
	
  Property:

  	
   

  	
  A number of Share Termination Delivery Units, as
  calculated by the Calculation Agent, equal to the Payment Obligation divided
  by the Share Termination Unit Price. The Calculation Agent shall adjust the
  Share Termination Delivery Property by replacing any fractional portion of a
  security therein with an amount of cash equal to the value of such fractional
  security based on the values used to calculate the Share Termination Unit
  Price.

  
	
   

  	
   

  	
   

  
	
  Share Termination Unit Price:

  	
   

  	
  The value of property contained in one Share
  Termination Delivery Unit on the date such Share Termination Delivery Units
  are to be delivered as Share Termination Delivery Property, as determined by
  the Calculation Agent in its discretion by commercially reasonable means and
  notified by the Calculation Agent to Dealer at the time of notification of
  the Payment Obligation.

  
	
   

  	
   

  	
   

  
	
  Share Termination Delivery Unit:

  	
   

  	
  In the case of a Termination Event, Event of Default
  or Delisting, one Share or, in the case of an Insolvency or Nationalization,
  one Share or a unit consisting of the number or amount of each type of
  property received by a holder of one Share (without consideration of any
  requirement to pay cash or other consideration in lieu of fractional amounts
  of any securities) in such Insolvency or Nationalization. If such Insolvency
  or Nationalization involves a choice of consideration to be received by
  holders, such holder shall be deemed to have elected to receive the maximum
  possible amount of cash.

  
	
   

  	
   

  	
   

  
	
  Failure to Deliver:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Other applicable provisions:

  	
   

  	
  If Share Termination Alternative is applicable, the
  provisions of Sections 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity
  Definitions will be applicable, except that all references in such provisions
  to “Physical Settlement” shall be read as references to “Share Termination Alternative”
  and all references to “Shares” shall be read as references to “Share
  Termination Delivery Units”; and provided
  that the Representation and Agreement contained in Section 9.11 of the Equity
  Definitions shall be modified by excluding any representations therein
  relating to restrictions, obligations, limitations or requirements under
  applicable securities laws as a result of the fact that Buyer is the issuer
  of any Share Termination Delivery Units (or any part thereof).

  

 

(d)           Disposition of Hedge Shares. 
Counterparty hereby agrees that if, in
the good faith reasonable judgment of Dealer, the Shares (the “Hedge Shares”) acquired by Dealer for the
purpose of hedging its obligations pursuant to the Transaction
cannot be sold in the U.S. public market by Dealer without registration under
the Securities Act, Counterparty shall, at its election: (i) in order to allow Dealer to sell the Hedge Shares
in a registered offering, make available to Dealer an effective registration
statement under the Securities Act to cover the resale of such Hedge Shares and
(A) enter into an agreement, in form and substance satisfactory to Dealer,
substantially in the

 10
 

 

 

form
of an underwriting agreement for a registered offering, (B) provide accountant’s “comfort” letters in customary
form for registered offerings of equity securities, (C) provide disclosure
opinions of nationally recognized outside counsel to Counterparty reasonably
acceptable to Dealer, (D) provide other customary opinions, certificates and
closing documents customary in form for registered offerings of equity
securities and (E) afford Dealer a reasonable opportunity to conduct a “due
diligence” investigation with respect to Counterparty customary in scope for
underwritten offerings of equity securities; provided,
however, that if Dealer, in its sole reasonable discretion, is not
satisfied with access to due diligence materials, the results of its due
diligence investigation, or the procedures and documentation for the registered
offering referred to above, then clause (ii) or clause (iii) of this Section
8(c) shall apply at the election of Counterparty; (ii) in order to allow Dealer
to sell the Hedge Shares in a private placement, enter into a private placement
agreement substantially similar to private placement purchase agreements
customary for private placements of equity securities, in form and substance
satisfactory to Dealer, including customary representations, covenants, blue
sky and other governmental filings and/or registrations, indemnities to Dealer,
due diligence rights (for Dealer or any designated buyer of the Hedge Shares
from Dealer), opinions and certificates and such other documentation as is
customary for private placements agreements, all reasonably acceptable to
Dealer (in which case, the Calculation Agent shall make any adjustments to the
terms of the Transaction that are necessary, in its reasonable judgment, to
compensate Dealer for any discount from the public market price of the Shares
incurred on the sale of Hedge Shares in a private placement); or (iii) purchase
the Hedge Shares from Dealer at the VWAP Price on such Exchange Business Days,
and in the amounts, requested by Dealer. 
“VWAP Price” means,
on any Exchange Business Day, the per Share volume-weighted average price as
displayed under the heading “Bloomberg VWAP” on Bloomberg page ELNK
<Equity> VAP (or any successor thereto) in respect of the period from
9:30 a.m. to 4:00 p.m. (New York City time) on such
Exchange Business Day (or if such volume-weighted average price is unavailable,
the market value of one Share on such Exchange Business Day, as determined by
the Calculation Agent using a volume-weighted method).

(e)           Amendment to Equity
Definitions and the Agreement.  The following
amendment shall be made to the Equity Definitions and to the Agreement:
Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting
from the fourth line thereof the word “or” after the word “official” and
inserting a comma therefor, and (2) deleting the semi-colon at the end of
subsection (B) thereof and inserting the following words therefor “or (C) at
Dealer’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA
Master Agreement with respect to that Issuer.”

(f)            Repurchase Notices.  Counterparty shall, on any day on which
Counterparty effects any repurchase of Shares, promptly give Dealer a written
notice of such repurchase (a “Repurchase Notice”)
on such day if, following such repurchase, the Notice Percentage as determined
on such day (i) in the case of the first such Repurchase Notice, is greater
than 8.00% and (ii) in the case of any subsequent Repurchase Notice, (A) is
greater than 8.00% and (B) is greater by at least 0.5% than the Notice
Percentage included in the immediately preceding Repurchase Notice.    The “Notice Percentage”
as of any day is the fraction, expressed as a percentage, the numerator of
which is the Number of Shares and the denominator of which is the number of
Shares outstanding on such day.  In the
event that Counterparty fails to provide Dealer with a Repurchase Notice on the
day and in the manner specified in this Section 8(f) then Counterparty agrees
to indemnify and hold harmless Dealer, its affiliates and their respective
directors, officers, employees, agents and controlling persons (Dealer and each
such person being an “Indemnified Party”)
from and against any and all losses, claims, damages and liabilities (or
actions in respect thereof), joint or several, to which such Indemnified Party
may become subject under applicable securities laws, including without
limitation, Section 16 of the Exchange Act, relating to or arising out of such
failure.  If for any reason the foregoing
indemnification is unavailable to any Indemnified Party or insufficient to hold
harmless any Indemnified Party, then Counterparty shall contribute, to the
maximum extent permitted by law, to the amount paid or payable by the
Indemnified Party as a result of such loss, claim, damage or liability.  In addition, Counterparty will reimburse any
Indemnified Party for all expenses (including reasonable counsel fees and
expenses) as they are incurred (after notice to Counterparty) in connection
with the investigation of, preparation for or defense or settlement of any
pending or threatened claim or any action, suit or proceeding arising
therefrom, whether or not such Indemnified Party is a party thereto and whether
or not such claim, action, suit or proceeding is initiated or brought by or on
behalf of Counterparty.  This indemnity
shall survive the completion of the Transaction contemplated by this
Confirmation and any assignment and delegation of the Transaction made pursuant
to this Confirmation or the Agreement shall inure to the benefit of any
permitted assignee of Dealer.

(g)           Transfer and Assignment.  Dealer may transfer or assign its rights and
obligations hereunder and under the Agreement, in whole or in part, to any of
its affiliates without the consent of Counterparty.  In addition,

 11
 

 

 

Dealer
may transfer or assign its rights and obligations hereunder and under the
Agreement, in whole or in part, to any unaffiliated third-party financial
institution without the consent of Counterparty, so long as the senior
unsecured debt rating of such third-party (or any guarantor of its obligations
under the Transaction) is equal to or greater than A+ as specified
by Standard and Poor’s Rating Services or Aa3 as specified by Moody’s Investor
Service, Inc., at the time of such assignment or transfer. 
In connection with any transfer or assignment by Dealer of its
rights and obligations hereunder and under the Agreement, Dealer shall promptly
provide written notice to Counterparty of such transfer or assignment, as the
case may be, and the identity of the relevant transferee or assignee.  In connection with any assignment or transfer
pursuant to the second immediately preceding sentence, the guarantee of any
guarantor of the relevant transferee’s obligations under the
Transaction shall constitute a Credit Support Document under Agreement.  If at any time at which the Equity Percentage
exceeds 7.5%, Dealer, in its discretion, is unable to effect a transfer or
assignment to an unaffiliated third party after its commercially reasonable
efforts on pricing terms reasonably acceptable to Dealer such that the Equity
Percentage is reduced to 7.5% or less, Dealer may designate any Scheduled
Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of the Transaction, such that the
Equity Percentage following such partial termination will be equal to or less
than 7.5%.  In the event that Dealer so
designates an Early Termination Date with respect to a portion of the
Transaction, a payment or delivery shall be made pursuant to Section 6 of the
Agreement as if (i) an Early Termination Date had been designated in respect of
a Transaction having terms identical to the Terminated Portion of the
Transaction, (ii) Counterparty shall be the sole Affected Party with respect to
such partial termination and (iii) such portion of the Transaction shall be the
only Terminated Transaction.  The “Equity Percentage” as of any day is the fraction, expressed
as a percentage, (A) the numerator of which is the Number of Shares and (B) the
denominator of which is the number of Shares outstanding on such day.  Counterparty may transfer or assign its
rights and obligations hereunder and under the Agreement, in whole or in part,
to any party with the consent of Dealer, such consent not to be unreasonably
withheld. 

(h)           Staggered Settlement. If the Staggered
Settlement Equity Percentage as of any Exchange Business Day during the
relevant “Cash Settlement Averaging Period”, as defined in the Indenture, is
greater than 4.5%, Dealer may, by notice to
Counterparty prior to any Settlement Date (a “Nominal
Settlement Date”), elect to deliver any Shares, cash or combination
thereof due hereunder on two or more dates (each, a “Staggered Settlement Date”) or at two or more times on the
Nominal Settlement Date as follows:

(i)            in
such notice, Dealer will specify to Counterparty the related Staggered
Settlement Dates (each of which will be on or prior to such Nominal Settlement
Date, but not prior to the beginning of such “Conversion Reference Period”) or
delivery times and how it will allocate the Shares it is required to deliver
under “Delivery Obligation” (above) among the Staggered Settlement Dates or
delivery times; and

(ii)           the
aggregate number of Shares and the aggregate amount of cash that Dealer will
deliver to Counterparty hereunder on all such Staggered Settlement Dates and
delivery times will equal the number of Shares and the amount of cash that
Dealer would otherwise be required to deliver on such Nominal Settlement Date.

The “Staggered
Settlement Equity Percentage” as of any day is the fraction,
expressed as a percentage, (A) the numerator of which is the sum of (x) the number
of Shares that Dealer or any of its affiliates beneficially own (within the
meaning of Section 13 of the Exchange Act) on such day, other than any Shares
so owned as a hedge of the Transaction, and (y) the Number of Shares and (B)
the denominator of which is the number of Shares outstanding on such day.

(i)            Disclosure.  Effective
from the date of commencement of discussions concerning the Transaction,
Counterparty and each of its employees, representatives, or other agents may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the Transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to Counterparty
relating to such tax treatment and tax structure.

(j)            Designation by Dealer. 
Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing Dealer to purchase, sell, receive or deliver any Shares
or other securities to or from Counterparty, Dealer may designate any of its
affiliates to purchase, sell, receive or deliver such shares or other
securities and otherwise to perform Dealer obligations in respect of the
Transaction and any such designee may assume such obligations.  Dealer shall be discharged of its obligations
to Counterparty to the extent of any such performance.

 12
 

 

 

(k)           Netting and Set-off. 
Each party waives any and all rights it may have to set off, whether
arising under any agreement, applicable law or otherwise.  The provisions of Section 2(c) of the
Agreement shall not be applicable to the Transaction.

(l)            Equity Rights.  Dealer
acknowledges and agrees that this Confirmation is not intended to convey to it
rights with respect to the Transaction that are senior to the claims of common
stockholders in the event of Counterparty’s bankruptcy.  For the avoidance of doubt, the parties agree
that the preceding sentence shall not apply at any time other than during Counterparty’s
bankruptcy to any claim arising as a result of a breach by Counterparty of any
of its obligations under this Confirmation or the Agreement.  

(m)          Early Unwind.  In the
event the sale by Counterparty of the Convertible Notes is not consummated with
UBS Securities LLC and Banc of America Securities LLC pursuant to the Underwriting
Agreement for any reason by the close of business in New York on November 17,
2006 (or such later date as agreed upon by the parties) (November 17, 2006 or
such later date being the “Early Unwind Date”),
the Transaction shall automatically terminate (the “Early Unwind”),
on the Early Unwind Date and (i) the Transaction and all of the respective
rights and obligations of Dealer and Counterparty thereunder shall be cancelled
and terminated and (ii) Counterparty shall pay to Dealer, other than in cases
involving a breach of the Underwriting Agreement by UBS Securities LLC, an
amount in cash equal to the aggregate amount of costs and expenses  relating to the unwinding of Dealer’s hedging
activities in respect of the Transaction (including market losses incurred in
reselling any Shares purchased by Dealer or its affiliates in connection with
such hedging activities).  Following such
termination, cancellation and payment, each party shall be released and
discharged by the other party from and agrees not to make any claim against the
other party with respect to any obligations or liabilities of either party
arising out of and to be performed in connection with the Transaction either
prior to or after the Early Unwind Date. 
Dealer and Counterparty represent and acknowledge to the other that upon
an Early Unwind and following the payment referred to above, all obligations
with respect to the Transaction shall be deemed fully and finally discharged.

(n)           Waiver of Trial by Jury. 
EACH OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF DEALER OR ITS
AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

(o)           Governing Law.  THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.  THE PARTIES HERETO IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION
WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE
IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

(p)           Role of Agent. Each party agrees and
acknowledges that Agent is acting as agent for both parties but does not
guarantee the performance of either party and neither Dealer nor Counterparty
shall contact the other with respect to any matter relating to the Transaction
without the direct involvement of Agent; (ii) Agent is not a member of the
Securities Investor Protection Corporation; (iii) Agent, Dealer and
Counterparty each hereby acknowledges that any transactions by Dealer or Agent
in the Shares will be undertaken by Dealer or Agent, as the case may, as principal
for its own account; (iv) all of the actions to be taken by Dealer and Agent in
connection with the Transaction, including but not limited to any exercise of
any rights with respect to the Options, shall be taken by Dealer or Agent
independently and without any advance or subsequent consultation with
Counterparty; and (v) Agent is hereby authorized to act as agent for
Counterparty only to the extent required to satisfy the requirements of Rule
15a-6 under the Exchange Act in respect of the Options described hereunder.

 13
 

 

 

Counterparty hereby
agrees (a) to check this Confirmation carefully and immediately upon receipt
so that errors or discrepancies can be promptly identified and rectified and
(b) to confirm that the foregoing (in the exact form provided by Dealer)
correctly sets forth the terms of the agreement between Dealer and Counterparty
with respect to the Transaction, by manually signing this Confirmation or this
page hereof as evidence of agreement to such terms and providing the other
information requested herein and immediately returning an executed copy to
Equity Risk Management (Corporates), Facsimile No. (212) 821-4610.

	
  

  	
   

  	
  Yours faithfully,

  
	
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UBS AG, LONDON BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Dmitriy Mandel

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Dmitriy Mandel

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Executive Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Equity Risk Management

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Akshay Mansukhani

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Akshay Mansukhani

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Associate Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Equity Risk Management

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UBS SECURITIES LLC, as agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Dmitriy Mandel

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Dmitriy Mandel

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Executive Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Equity Risk Management

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Akshay Mansukhani

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Akshay Mansukhani

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Associate Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Equity Risk Management

  

 

Agreed and Accepted By:

EARTHLINK, INC.

 

	
  By:

  	
  /s/ Kevin M. Dotts

  	
   

  
	
  Name:

  	
  Kevin M. Dotts

  	
   

  
	
  Title:

  	
  Executive Vice President,

  Chief Financial Officer

  	
   

  
				

 

 14

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