Document:

exv10w2

 

Exhibit 10.2

SECOND AMENDED AND RESTATED SECURITY AGREEMENT

Dated December 7, 2007

From

The Grantors referred to herein

as Grantors

to

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Section	 	 	 	Page
	Section 1.
	 	Grant of Security	 	2
	 
	 	 	 	 
	Section 2.
	 	Security for Obligations	 	6
	 
	 	 	 	 
	Section 3.
	 	Grantors Remain Liable	 	6
	 
	 	 	 	 
	Section 4.
	 	Delivery and Control of Security Collateral	 	6
	 
	 	 	 	 
	Section 5.
	 	Maintaining the Account Collateral	 	7
	 
	 	 	 	 
	Section 6.
	 	Investing of Amounts in the Collateral Account and the L/C Collateral Account	 	9
	 
	 	 	 	 
	Section 7.
	 	Release of Amounts	 	9
	 
	 	 	 	 
	Section 8.
	 	Maintaining Electronic Chattel Paper, Transferable Records and Letter-of-Credit Rights and Giving	 	 
	 
	 	Notice of Commercial Tort Claims	 	9
	 
	 	 	 	 
	Section 9.
	 	Representations and Warranties	 	10
	 
	 	 	 	 
	Section 10.
	 	Further Assurances	 	14
	 
	 	 	 	 
	Section 11.
	 	As to Equipment and Inventory	 	15
	 
	 	 	 	 
	Section 12.
	 	Insurance	 	16
	 
	 	 	 	 
	Section 13.
	 	Post-Closing Changes; Bailees; Collections on Assigned Agreements,	 	 
	 
	 	Receivables and Related Contracts	 	16
	 
	 	 	 	 
	Section 14.
	 	As to Intellectual Property Collateral	 	18
	 
	 	 	 	 
	Section 15.
	 	Voting Rights; Dividends; Etc.	 	19
	 
	 	 	 	 
	Section 16.
	 	As to the Assigned Agreements	 	20
	 
	 	 	 	 
	Section 17.
	 	Payments Under the Assigned Agreements	 	21
	 
	 	 	 	 
	Section 18.
	 	As to Letter-of-Credit Rights	 	21
	 
	 	 	 	 
	Section 19.
	 	Transfers and Other Liens; Additional Shares	 	21
	 
	 	 	 	 
	Section 20.
	 	Administrative Agent Appointed Attorney-in-Fact	 	22
	 
	 	 	 	 
	Section 21.
	 	Administrative Agent May Perform	 	22
	 
	 	 	 	 
	Section 22.
	 	The Administrative Agent’s Duties	 	22
	 
	 	 	 	 
	Section 23.
	 	Remedies	 	23

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	Section	 	 	 	Page
	Section 24.
	 	Indemnity and Expenses	 	25
	 
	 	 	 	 
	Section 25.
	 	Amendments; Waivers; Additional Grantors; Etc.	 	25
	 
	 	 	 	 
	Section 26.
	 	Notices, Etc.	 	25
	 
	 	 	 	 
	Section 27.
	 	Continuing Security Interest; Assignments under the Credit Agreement	 	26
	 
	 	 	 	 
	Section 28.
	 	Release; Termination	 	26
	 
	 	 	 	 
	Section 29.
	 	Execution in Counterparts	 	26
	 
	 	 	 	 
	Section 30.
	 	The Mortgages	 	27
	 
	 	 	 	 
	Section 31.
	 	Governing Law	 	27

	 	 	 	 	 
	Schedules I

	 	-
	 	Location, Chief Executive Office, Place Where Agreements Are Maintained, Type Of Organization,

Jurisdiction Of Organization And Organizational Identification Number
	Schedule II

	 	-
	 	Pledged Equity and Pledged Debt
	Schedule III

	 	-
	 	Assigned Agreements
	Schedule IV

	 	-
	 	Locations of Equipment and Inventory
	Schedule V

	 	-
	 	Changes in Name, Location, Etc.
	Schedule VI

	 	-
	 	Patents, Trademarks and Trade Names, Copyrights and IP Agreements
	Schedule VII

	 	-
	 	Account Collateral
	Schedule VIII

	 	-
	 	Account Collateral not Subject to Account Control Agreement
	Schedule IX

	 	-
	 	Commercial Tort Claims
	Schedule X

	 	-
	 	Letters of Credit
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	-
	 	Form of Security Agreement Supplement
	Exhibit B

	 	-
	 	Form of Account Control Agreement
	Exhibit C

	 	-
	 	Form of Consent and Agreement
	Exhibit D

	 	-
	 	Form of Securities Account Control Agreement
	Exhibit E

	 	-
	 	Form of Commodity Account Control Agreement
	Exhibit F

	 	-
	 	Form of Intellectual Property Security Agreement
	Exhibit G

	 	-
	 	Form of Intellectual Property Security Agreement Supplement
	Exhibit H

	 	-
	 	Form of Consent to Assignment of Letter of Credit Rights

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SECOND AMENDED AND RESTATED SECURITY AGREEMENT

          SECOND AMENDED AND RESTATED SECURITY AGREEMENT dated December 7, 2007 made by GRUBB & ELLIS
COMPANY, a Delaware corporation (the “Borrower”), the other Persons listed on the signature pages
hereof and the Additional Grantors (as defined in Section 25) (the Borrower, the Persons so listed
and the Additional Grantors being, collectively, the “Grantors”), to DEUTSCHE BANK TRUST COMPANY
AMERICAS, as administrative agent (in such capacity, together with any successor administrative
agent appointed pursuant to Article VII of the Credit Agreement (as hereinafter defined), the
“Administrative Agent”) for the Secured Parties (as defined in the Credit Agreement).

          PRELIMINARY STATEMENTS.

          (1) The Borrower has entered into a Second Amended and Restated Credit Agreement dated as of
December 7, 2007 (said Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the “Credit Agreement”) with the Lender
Parties and the Administrative Agent (each as defined therein).

          (2) Pursuant to the Credit Agreement, the Grantors are entering into this Agreement in order
to grant to the Administrative Agent for the ratable benefit of the Secured Parties a security
interest in the Collateral (as hereinafter defined).

          (3) Each Grantor is the owner of the shares of stock or other Equity Interests (the “Initial
Pledged Equity”) set forth opposite such Grantor’s name on and as otherwise described in Part I of
Schedule II hereto and issued by the Persons named therein and of the indebtedness (the “Initial
Pledged Debt”) set forth opposite such Grantor’s name on and as otherwise described in Part II of
Schedule II hereto and issued by the obligors named therein.

          (4) The Borrower has security entitlements (the “Pledged Security Entitlements”) with respect
to all the financial assets (the “Pledged Financial Assets”) credited from time to time to the
Borrower’s accounts (the “Securities Accounts”), as described in Part II of Schedule VII hereto.

          (5) The Borrower has opened the deposit accounts (the “Deposit Accounts”), as described in
Part I of Schedule VII hereto.

          (6) The Borrower has opened other deposit accounts (the “Other Deposit Accounts”) with banks,
in the name of the Borrower and subject to the terms of this Agreement, as described in
Schedule VIII hereto.

          (7) It is a condition precedent to the making of Advances and the issuance of Letters of
Credit by the Lender Parties under the Credit Agreement and the entry into Secured Hedge Agreements
by the Hedge Banks from time to time that the Grantors shall have granted the assignment and
security interest and made the pledge and assignment contemplated by this Agreement.

          (8) Each Grantor will derive substantial direct and indirect benefit from the transactions
contemplated by the Loan Documents.

          (9) Terms defined in the Credit Agreement and not otherwise defined in this Agreement are used
in this Agreement as defined in the Credit Agreement. Further, unless otherwise defined in this
Agreement or in the Credit Agreement, terms defined in Article 8 or 9 of the UCC (as

 

 

defined below) and/or in the Federal Book Entry Regulations (as defined below) are used in
this Agreement as such terms are defined in such Article 8 or 9 and/or the Federal Book Entry
Regulations. “UCC” means the Uniform Commercial Code as in effect, from time to time, in the State
of New York; provided that, if perfection or the effect of perfection or non-perfection or the
priority of any security interest in any Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial
Code as in effect from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or priority. The term
"Federal Book Entry Regulations” means (a) the federal regulations contained in Subpart B
(“Treasury/Reserve Automated Debt Entry System (TRADES)”) governing book-entry securities
consisting of U.S. Treasury bills, notes and bonds and Subpart D (“Additional Provisions”) of 31
C.F.R. Part 357, 31 C.F.R. § 357.2, § 357.10 through § 357.15 and § 357.40 through § 357.45 and (b)
to the extent substantially identical to the federal regulations referred to in clause (a) above
(as in effect from time to time), the federal regulations governing other book-entry securities.

          NOW, THEREFORE, in consideration of the premises and in order to induce the Lender Parties to
make Advances and issue Letters of Credit under the Credit Agreement and to induce the Hedge Banks
to enter into Secured Hedge Agreements from time to time, each Grantor hereby agrees with the
Administrative Agent for the ratable benefit of the Secured Parties as follows:

          Section 1. Grant of Security. Each Grantor hereby grants to the Administrative Agent,
for the ratable benefit of the Secured Parties, a security interest in, such Grantor’s right, title
and interest in and to the following, in each case, as to each type of property described below,
whether now owned or hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the “Collateral”):

     (a) all equipment in all of its forms, including, without limitation, all machinery,
tools, motor vehicles, vessels, aircraft, furniture and fixtures, and all parts thereof and
all accessions thereto and all software related thereto, including, without limitation,
software that is embedded in and is part of the equipment (any and all such property being
the “Equipment”);

     (b) all inventory in all of its forms, including, without limitation, (i) all raw
materials, work in process, finished goods and materials used or consumed in the
manufacture, production, preparation or shipping thereof, (ii) goods in which such Grantor
has an interest in mass or a joint or other interest or right of any kind (including,
without limitation, goods in which such Grantor has an interest or right as consignee) and
(iii) goods that are returned to or repossessed or stopped in transit by such Grantor), and
all accessions thereto and products thereof and documents therefor, and all software related
thereto, including, without limitation, software that is embedded in and is part of the
inventory (any and all such property being the “Inventory”);

     (c) all accounts, chattel paper (including, without limitation, tangible chattel paper
and electronic chattel paper), instruments (including, without limitation, promissory
notes), deposit accounts, letter-of-credit rights, general intangibles (including, without
limitation, payment intangibles) and other obligations of any kind, whether or not arising
out of or in connection with the sale or lease of goods or the rendering of services and
whether or not earned by performance, and all rights now or hereafter existing in and to all
supporting obligations and in and to all security agreements, mortgages, Liens, leases,
letters of credit and other contracts securing or otherwise relating to the foregoing
property (any and all of such accounts, chattel paper, instruments, deposit accounts,
letter-of-credit rights, general intangibles and other obligations, to the extent not referred to in clause (d), (e) or (f) below, being the
“Receivables”, and any and all such supporting obligations, security agreements, mortgages,
Liens, leases, letters

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of credit and other contracts being the “Related Contracts”);
provided however that the security interest granted under this Section 1(c) shall not attach
to any of the Receivables or Related Contracts that by their terms, prohibit or require the
consent of any Person (other than the Grantor) as a condition to the creation by such
Grantor of a lien thereon, but only, in all cases, to the extent, and for so long as, such
prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by
the UCC or any other applicable law;

     (d) the following (the “Security Collateral”):

     (i) the Initial Pledged Equity and the certificates, if any, representing the
Initial Pledged Equity, and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Initial Pledged
Equity and all subscription warrants, rights or options issued thereon or with
respect thereto;

     (ii) the Initial Pledged Debt and the instruments, if any, evidencing the
Initial Pledged Debt, and all interest, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Debt;

     (iii) all additional shares of stock and other Equity Interests from time to
time acquired by such Grantor in any manner (such shares and other Equity Interests,
together with the Initial Pledged Equity, being the “Pledged Equity”), and the
certificates, if any, representing such additional shares or other Equity Interests,
and all dividends, distributions, return of capital, cash, instruments and other
property from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such shares or other Equity Interests and all
subscription warrants, rights or options issued thereon or with respect thereto;

     (iv) all additional indebtedness from time to time owed to such Grantor (such
indebtedness, together with the Initial Pledged Debt, being the “Pledged Debt”) and
the instruments, if any, evidencing such indebtedness, and all interest, cash,
instruments and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such indebtedness;

     (v) the Securities Accounts, all Pledged Security Entitlements with respect to
all Pledged Financial Assets from time to time credited to the Securities Accounts,
and all Pledged Financial Assets, and all dividends, distributions, return of
capital, interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of
such Pledged Security Entitlements or such Pledged Financial Assets and all
subscription warrants, rights or options issued thereon or with respect thereto;

     (vi) the Commodities Account, all Pledged Commodity Contracts from time to time
carried in the Commodities Account, and all value, cash, instruments and other
property from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such Pledged Commodity Contracts; and

     (vii) all other investment property (including, without limitation, all (A)
securities, whether certificated or uncertificated, (B) security entitlements, (C)
securities accounts, (D) commodity contracts and (E) commodity accounts) in which
such Grantor

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has now, or acquires from time to time hereafter, any right, title or
interest in any manner, and the certificates or instruments, if any, representing or
evidencing such investment property, and all dividends, distributions, return of
capital, interest, distributions, value, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such investment property and all subscription warrants,
rights or options issued thereon or with respect thereto;

     (e) each of the agreements listed on Schedule III hereto, the IP Agreements (as
hereinafter defined), and each Hedge Agreement to which such Grantor is now or may hereafter
become a party, in each case as such agreements may be amended, amended and restated,
supplemented or otherwise modified from time to time (collectively, the “Assigned
Agreements”), including, without limitation, (i) all rights of such Grantor to receive
moneys due and to become due under or pursuant to the Assigned Agreements, (ii) all rights
of such Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty with
respect to the Assigned Agreements, (iii) claims of such Grantor for damages arising out of
or for breach of or default under the Assigned Agreements and (iv) the right of such Grantor
to terminate the Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder (all such Collateral being the “Agreement
Collateral”);

     (f) the following (collectively, the “Account Collateral”):

     (i) any collateral deposit account opened by the Borrower with Deutsche Bank
Trust Company Americas (or such other financial institution as the Administrative
Agent may direct), in the name of the Administrative Agent and under the sole
control and dominion of the Administrative Agent and subject to the terms of this
Agreement (the “Collateral Account”), any Letter of Credit collateral deposit
account opened by the Borrower with Deutsche Bank Trust Company Americas (or such
other financial institution as the Administrative Agent may direct), in the name of
the Administrative Agent and under the sole control and dominion of the
Administrative Agent and subject to the terms of this Agreement (the “L/C Collateral
Account”), the Deposit Accounts and the Other Deposit Accounts and all funds and
financial assets from time to time credited thereto (including, without limitation,
all Cash Equivalents), all interest, dividends, distributions, cash, instruments and
other property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such funds and financial assets, and all
certificates and instruments, if any, from time to time representing or evidencing
the Collateral Account, the L/C Collateral Account, the Deposit Accounts and the
Other Deposit Accounts;

     (ii) all promissory notes, certificates of deposit, deposit accounts, checks
and other instruments from time to time delivered to or otherwise possessed by the
Administrative Agent for or on behalf of such Grantor, including, without
limitation, those delivered or possessed in substitution for or in addition to any
or all of the then existing Account Collateral;

     (iii) all interest, dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the then existing Account Collateral; and

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     (g) the following (collectively, the “Intellectual Property Collateral”):

     (i) all patents, patent applications, utility models and statutory invention
registrations, all inventions claimed or disclosed therein and all improvements
thereto (“Patents”);

     (ii) all trademarks, service marks, domain names, trade dress, logos, designs,
slogans, trade names, business names, corporate names and other source identifiers,
whether registered or unregistered (provided that no security interest shall be
granted in United States intent-to-use trademark applications to the extent that,
and solely during the period in which, the grant of a security interest therein
would impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together, in each case, with the
goodwill symbolized thereby (“Trademarks”);

     (iii) all copyrights, including, without limitation, copyrights in Computer
Software (as hereinafter defined), internet web sites and the content thereof,
whether registered or unregistered (“Copyrights”);

     (iv) all computer software, programs and databases (including, without
limitation, source code, object code and all related applications and data files),
firmware and documentation and materials relating thereto, together with any and all
maintenance rights, service rights, programming rights, hosting rights, test rights,
improvement rights, renewal rights and indemnification rights and any substitutions,
replacements, improvements, error corrections, updates and new versions of any of
the foregoing (“Computer Software”);

     (v) all confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, databases and data,
including, without limitation, technical data, financial, marketing and business
data, pricing and cost information, business and marketing plans and customer and
supplier lists and information (collectively, “Trade Secrets”), and all other
intellectual, industrial and intangible property of any type, including, without
limitation, industrial designs and mask works;

     (vi) all registrations and applications for registration for any of the
foregoing, including, without limitation, those registrations and applications for
registration set forth in Schedule VI hereto (as such Schedule VI may be
supplemented from time to time by supplements to this Agreement, each such
supplement being substantially in the form of Exhibit G hereto (an “IP Security
Agreement Supplement”) executed by such Grantor to the Administrative Agent from
time to time), together with all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations thereof;

     (vii) all tangible embodiments of the foregoing, all rights in the foregoing
provided by international treaties or conventions, all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto;

     (viii) all agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any of the foregoing to which such
Grantor, now or hereafter, is a party or a beneficiary, including, without limitation,
the agreements set forth in Schedule VI hereto (“IP Agreements”); and

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     (ix) any and all claims for damages and injunctive relief for past, present and
future infringement, dilution, misappropriation, violation, misuse or breach with
respect to any of the foregoing, with the right, but not the obligation, to sue for
and collect, or otherwise recover, such damages;

     (h) all commercial tort claims described in Schedule IX hereto (collectively the
“Commercial Tort Claims Collateral”);

     (i) all books and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of such Grantor pertaining to any
of the Collateral; and

     (j) all proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to, and supporting obligations relating to, any and
all of the Collateral (including, without limitation, proceeds, collateral and supporting
obligations that constitute property of the types described in clauses (a) through (i) of
this Section 1 and this clause (j)) and, to the extent not otherwise included, all
(A) payments under insurance (whether or not the Administrative Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, (B) tort claims, including,
without limitation, all commercial tort claims and (C) cash.

          Section 2. Security for Obligations. This Agreement secures, in the case of each
Grantor, the payment of all Obligations of each Loan Party now or hereafter existing under the Loan
Documents, whether direct or indirect, absolute or contingent, and whether for principal,
reimbursement obligations, interest, fees, premiums, penalties, indemnifications, contract causes
of action, costs, expenses or otherwise (all such Obligations being the “Secured Obligations”).

          Section 3. Grantors Remain Liable. Anything herein to the contrary notwithstanding,
(a) each Grantor shall remain liable under the contracts and agreements included in such Grantor’s
Collateral to the extent set forth therein to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent of any of the rights hereunder shall not release any Grantor from any of its
duties or obligations under the contracts and agreements included in the Collateral and (c) no
Secured Party shall have any obligation or liability under the contracts and agreements included in
the Collateral by reason of this Agreement or any other Loan Document, nor shall any Secured Party
be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.

          Section 4. Delivery and Control of Security Collateral. (a) All certificates or
instruments representing or evidencing Security Collateral shall be delivered to and held by or on
behalf of the Administrative Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Administrative Agent. The Administrative Agent shall
have the right, at any time in its discretion and without notice to any Grantor,
to transfer to or to register in the name of the Administrative Agent or any of its nominees
any or all of the Security Collateral, subject only to the revocable rights specified in
Section 15(a). For the better perfection of the Administrative Agent’s rights in and to the
Security Collateral, each Grantor shall forthwith, upon the pledge hereunder of any Security
Collateral in which it has any right, title or interest, cause such Security Collateral to be
registered in the name of the Administrative Agent or such of its nominees as the Administrative
Agent shall direct, subject only to the revocable rights specified in Section 15(a). In addition,
the Administrative Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Security

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Collateral for certificates or instruments of smaller or larger
denominations. Also, the Administrative Agent shall have the right at any time to convert Security
Collateral consisting of financial assets credited to the Securities Accounts to Security
Collateral consisting of financial assets held directly by the Administrative Agent, and to convert
Security Collateral consisting of financial assets held directly by the Administrative Agent to
Security Collateral consisting of financial assets credited to the Securities Accounts.

          (b) With respect to any Security Collateral in which any Grantor has any right, title or
interest and that constitutes an uncertificated security, such Grantor will cause the issuer
thereof either (i) to register the Administrative Agent as the registered owner of such security or
(ii) to agree in an authenticated record with such Grantor and the Administrative Agent that such
issuer will comply with instructions with respect to such security originated by the Administrative
Agent without further consent of such Grantor, such authenticated record to be in form and
substance satisfactory to the Administrative Agent. With respect to any Security Collateral in
which any Grantor has any right, title or interest and that is not an uncertificated security, upon
the request of the Administrative Agent, such Grantor will notify each such issuer of Pledged
Equity that such Pledged Equity is subject to the security interest granted hereunder.

          (c) With respect to any Security Collateral in which any Grantor has any right, title or
interest and that constitutes a security entitlement in which the Administrative Agent is not the
entitlement holder, such Grantor will cause the securities intermediary with respect to such
security entitlement either (i) to identify in its records the Administrative Agent as the
entitlement holder of such security entitlement against such securities intermediary or (ii) to
agree in an authenticated record with such Grantor and the Administrative Agent that such
securities intermediary will comply with entitlement orders (that is, notifications communicated to
such securities intermediary directing transfer or redemption of the financial asset to which such
Grantor has a security entitlement) originated by the Administrative Agent without further consent
of such Grantor, such authenticated record to be in substantially the form of Exhibit D hereto or
otherwise in form and substance satisfactory to the Administrative Agent (such agreement being a
“Securities Account Control Agreement”).

          (d) With respect to any Security Collateral in which any Grantor has any right, title or
interest and that constitutes a commodity contract, such Grantor shall cause the commodity
intermediary with respect to such commodity contract to agree in an authenticated record with such
Grantor and the Administrative Agent that such commodity intermediary will apply any value
distributed on account of such commodity contract as directed by the Administrative Agent without
further consent of such Grantor, such authenticated record to be in substantially the form of
Exhibit E hereto or otherwise in form and substance satisfactory to the Administrative Agent (such
agreement being a “Commodity Account Control Agreement”, and all such authenticated records,
together with all Securities Account Control Agreements being, collectively, “Security Control
Agreements”).

          (e) No Grantor will change or add any securities intermediary or commodity intermediary that
maintains any securities account or commodity account in which any of the Collateral is credited or
carried, or change or add any such securities account or commodity account, in each case
without first complying with the above provisions of this Section 4 in order to perfect the
security interest granted hereunder in such Collateral.

          (f) Upon the request of the Administrative Agent, such Grantor will notify each such issuer of
Pledged Debt that such Pledged Debt is subject to the security interest granted hereunder.

     Section 5. Maintaining the Account Collateral. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit
shall be outstanding, any Secured Hedge Agreement shall be in effect or any Lender Party shall have
any Commitment:

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     (a) Each Grantor will maintain all Account Collateral only with the Administrative
Agent or with banks (the “Pledged Account Banks”) that have agreed, in a record
authenticated by the Grantor, the Administrative Agent and the Pledged Account Banks, to (i)
comply with instructions originated by the Administrative Agent directing the disposition of
funds in the Account Collateral without the further consent of the Grantor and (ii) waive or
subordinate in favor of the Administrative Agent all claims of the Pledged Account Banks
(including, without limitation, claims by way of a security interest, lien or right of
setoff or right of recoupment) to the Account Collateral, which authenticated record shall
be substantially in the form of Exhibit B hereto, or shall otherwise be in form and
substance satisfactory to the Administrative Agent (the “Account Control Agreement”);
provided, however, this Section 5(a) shall not apply to Other Deposit Accounts listed in
Schedule VIII hereto.

     (b) Each Grantor will (i) immediately instruct each Person obligated at any time to
make any payment to such Grantor for any reason (an “Obligor”) to make such payment to an
Other Deposit Account or a Deposit Account and (ii) deposit in an Other Deposit Account or a
Deposit Account or pay to the Administrative Agent for deposit in a Deposit Account, at the
end of each Business Day, all proceeds of Collateral and all other cash of such Grantor.

     (c) Each Grantor agrees that it will not add any bank that maintains a deposit account
for such Grantor or open any new deposit account with any then existing Pledged Account Bank
unless (i) the Administrative Agent shall have received at least 10 days’ prior written
notice of such additional bank or such new deposit account and (ii) the Administrative Agent
shall have received, in the case of a bank or Pledged Account Bank that is not the
Administrative Agent, an Account Control Agreement authenticated by such new bank and such
Grantor, or a supplement to an existing Account Control Agreement with such then existing
Pledged Account Bank, covering such new deposit account (and, upon the receipt by the
Administrative Agent of such Account Control Agreement or supplement, Schedule VII hereto
shall be automatically amended to include such Deposit Account). Each Grantor agrees that
it will not terminate any bank as a Pledged Account Bank or terminate any Account
Collateral, except that the Grantor may terminate an Other Deposit Account if it gives the
Administrative Agent at least 10 days’ prior written notice of such termination (and, upon
such termination, Schedule VIII hereto shall be automatically amended to delete such Other
Deposit Account).

     (d) Upon any termination by a Grantor of any Deposit Account by such Grantor, or any
Pledged Account Bank with respect thereto, such Grantor will immediately (i) transfer all
funds and property held in such terminated Deposit Account to another Deposit Account listed
in Part II of Schedule VII and (ii) notify all Obligors that were making payments to such
Deposit Account to make all future payments to another Deposit Account listed in Part II of
Schedule VII hereto so that the Administrative Agent shall have a continuously perfected
security interest in such Account Collateral, funds and property. Each Grantor agrees to terminate any or
all Account Collateral and Account Control Agreements upon request by the Administrative
Agent.

     (e) The Borrower may draw checks on, and otherwise withdraw amounts only from, the
Deposit Accounts and in such amounts as may be required in the ordinary course of business
(including, without limitation, to pay or prepay Debt outstanding under the Loan Documents).

     (f) The Administrative Agent shall have sole right to direct the disposition of funds
with respect to the Collateral Account and the L/C Collateral Account; and it shall be a
term and

8

 

condition of each of the Collateral Account and the L/C Collateral Account,
notwithstanding any term or condition to the contrary in any other agreement relating to the
Collateral Account and the L/C Collateral Account, as the case may be, that no amount
(including, without limitation, interest on Cash Equivalents credited thereto) will be paid
or released to or for the account of, or withdrawn by or for the account of, the Borrower or
any other Person from the Collateral Account and the L/C Collateral Account, as the case may
be.

     (g) The Administrative Agent may, (i) at any time and without notice to, or consent
from, the Grantor, transfer, or direct the transfer of, funds from the Account Collateral to
satisfy the Grantor’s obligations under the Loan Documents if an Event of Default shall have
occurred and be continuing and (ii) at any time after the Collateral Account has been opened
and without notice to, or consent from, the Grantor, transfer, or direct the transfer of,
funds from the Deposit Accounts to the Collateral Account.

          Section 6. Investing of Amounts in the Collateral Account and the L/C Collateral
Account. The Administrative Agent will, subject to the provisions of Sections 5, 7 and 23, at
any time after the Collateral Account or L/C Collateral Account, as the case may be, has been
opened, from time to time (a) invest, or direct the applicable Pledged Account Bank to invest,
amounts received with respect to the Collateral Account and the L/C Collateral Account in such Cash
Equivalents credited to (A) the Collateral Account and the L/C Collateral Account, respectively, as
the Borrower may select and the Administrative Agent may approve or (B) in the case of Cash
Equivalents consisting of Securities Collateral, a securities account in which the Administrative
Agent is the securities intermediary or a securities account subject to a Securities Account
Control Agreement, and (b) invest interest paid on the Cash Equivalents referred to in clause (a)
above, and reinvest other proceeds of any such Cash Equivalents that may mature or be sold, in each
case in such Cash Equivalents credited in the same manner. Interest and proceeds that are not
invested or reinvested in Cash Equivalents as provided above shall be deposited and held in the
relevant Collateral Account or L/C Collateral Account. In addition, the Administrative Agent shall
have the right at any time to exchange, or direct the applicable Pledged Account Bank to exchange,
such Cash Equivalents for similar Cash Equivalents of smaller or larger determinations, or for
other Cash Equivalents, credited to the Collateral Account or the L/C Collateral Account, as the
case may be.

          Section 7. Release of Amounts. So long as no Default under Section 6.01(a) or (f) of
the Credit Agreement or Event of Default shall have occurred and be continuing, the Administrative
Agent will pay and release, or direct the applicable Pledged Account Bank to pay and release, to
the Borrower or at its order or, at the request of the Borrower, to the Administrative Agent to be
applied to the Obligations of the Borrower under the Loan Documents, in the case of the L/C
Collateral Account, such amount, if any, as is then on deposit in the L/C Collateral Account to the
extent permitted to be released under the terms of the Credit Agreement
and, in the case of the Collateral Account, the amount, if any, by which the aggregate
principal amount of the Cash Equivalents credited to the Collateral Account exceeds all amounts
then due and payable under the Loan Documents together with all accrued and unpaid interest and
fees under the Credit Agreement.

     Section 8. Maintaining Electronic Chattel Paper, Transferable Records and Letter-of-Credit
Rights and Giving Notice of Commercial Tort Claims. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit
shall be outstanding, any Secured Hedge Agreement shall be in effect or any Lender Party shall have
any Commitment:

9

 

     (a) Each Grantor will maintain all (i) electronic chattel paper so that the
Administrative Agent has control of the electronic chattel paper in the manner specified in
Section 9-105 of the UCC and (ii) all transferable records so that the Administrative Agent
has control of the transferable records in the manner specified in Section 16 of the Uniform
Electronic Transactions Act, as in effect in the jurisdiction governing such transferable
record (“UETA” );

     (b) Each Grantor will maintain all letter-of-credit rights assigned to the
Administrative Agent, including, without limitation, all letter-of-credit rights associated
with each letter of credit that is designated on Schedule X as constituting Collateral
(each, a “Collateral L/C”), if any, so that the Administrative Agent has control of the
letter-of-credit rights in the manner specified in Section 9-107 of the UCC; and

     (c) Each Grantor will immediately give notice to the Administrative Agent of any
commercial tort claim that may arise in the future and will immediately execute or otherwise
authenticate a supplement to this Agreement, and otherwise take all necessary action, to
subject such commercial tort claim to the first priority security interest created under
this Agreement.

          Section 9. Representations and Warranties. Each Grantor represents and warrants as
follows:

     (a) Such Grantor’s exact legal name, as defined in Section 9-503(a) of the UCC, is
correctly set forth in Schedule I hereto. Such Grantor has only the trade names, domain
names and marks listed on Schedule VI hereto. Such Grantor is located (within the meaning
of Section 9-307 of the UCC) and has its chief executive office and the office in which it
maintains the original copies of each Assigned Agreement and Related Contract to which such
Grantor is a party and all originals of all chattel paper that evidence Receivables of such
Grantor, in the state or jurisdiction set forth in Schedule I hereto. The information set
forth in Schedule I hereto with respect to such Grantor is true and accurate in all
respects. Such Grantor has not previously changed its name, location, chief executive
office, place where it maintains its agreements, type of organization, jurisdiction of
organization or organizational identification number from those set forth in Schedule I
hereto except as disclosed in Schedule V hereto.

     (b) All of the Equipment and Inventory of such Grantor are located at the places
specified therefor in Schedule IV hereto, as such Schedule IV may be amended from time to
time pursuant to Section 11(a). Within the 3 years preceding the execution of this
Agreement, such Grantor has not previously changed the location of its Equipment and
Inventory except as set forth in Schedule V hereto. All Security Collateral consisting of
certificated securities and instruments have been delivered to the Administrative Agent.
Original copies of each Assigned
Agreement and all originals of all chattel paper that evidence Receivables have been
delivered to the Administrative Agent, in each case to the extent that delivery thereof to
the Administrative Agent is required under the Credit Agreement. None of the Receivables or
Agreement Collateral is evidenced by a promissory note or other instrument that has not been
delivered to the Administrative Agent.

     (c) Such Grantor is the legal and beneficial owner of the Collateral of such Grantor
free and clear of any Lien, claim, option or right of others, except for the security
interest created under this Agreement or permitted under the Credit Agreement. No effective
financing statement or other instrument similar in effect covering all or any part of such
Collateral or listing such Grantor or any trade name of such Grantor as debtor is on file in
any recording office, except such as may have been filed in favor of the Administrative
Agent relating to the Loan Documents or as otherwise permitted under the Credit Agreement.

10

 

     (d) Such Grantor has exclusive possession and control of the Equipment and Inventory
other than Inventory stored at any leased premises or warehouse for which a landlord’s or
warehouseman’s agreement, in form and substance satisfactory to the Administrative Agent, is
in effect and which leased premises or warehouse is so indicated by an asterisk on
Schedule IV hereto, as such Schedule IV may be amended from time to time pursuant to
Section 11(a). In the case of Equipment and Inventory located on leased premises or in
warehouses, no lessor or warehouseman of any premises or warehouse upon or in which such
Equipment or Inventory is located has (i) issued any warehouse receipt or other receipt in
the nature of a warehouse receipt in respect of any Equipment or Inventory, (ii) issued any
document for any of such Grantor’s Equipment or Inventory, (iii) received notification of
any secured party’s interest (other than the security interest granted hereunder) in such
Grantor’s Equipment or Inventory or (iv) any Lien, claim or charge (based on contract,
statute or otherwise) on such Equipment and Inventory.

     (e) The Pledged Equity pledged by such Grantor hereunder has been duly authorized and
validly issued and is fully paid and non-assessable. With respect to the Pledged Equity
that is an uncertificated security, such Grantor has caused the issuer thereof either (i) to
register the Administrative Agent as the registered owner of such security or (ii) to agree
in an authenticated record with such Grantor and the Administrative Agent that such issuer
will comply with instructions with respect to such security originated by the Administrative
Agent without further consent of such Grantor. If such Grantor is an issuer of Pledged
Equity, such Grantor confirms that it has received notice of such security interest. The
Pledged Debt pledged by such Grantor hereunder has been duly authorized, authenticated or
issued and delivered, is the legal, valid and binding obligation of the issuers thereof, is
evidenced by one or more promissory notes (which notes have been delivered to the
Administrative Agent) and is not in default.

     (f) The Initial Pledged Equity pledged by such Grantor constitutes the percentage of
the issued and outstanding Equity Interests of the issuers thereof indicated on Schedule II
hereto. The Initial Pledged Debt constitutes all of the outstanding indebtedness owed to
such Grantor by the issuers thereof and is outstanding in the principal amount indicated on
Schedule II hereto.

     (g) All of the investment property owned by such Grantor is listed on Schedule II
hereto.

     (h) The Assigned Agreements to which such Grantor is a party, true and complete copies
of which (other than the Hedge Agreements) have been furnished to each Secured Party, have
been duly authorized, executed and delivered by such Grantor and, to such Grantor’s
knowledge, by all other parties thereto, have not been amended, amended and restated,
supplemented or otherwise modified, are in full force and effect and are binding upon
and enforceable against such Grantor and, to such Grantor’s knowledge, against all other
parties thereto in accordance with their terms. There exists no default under any Assigned
Agreement to which such Grantor is a party by such Grantor or, to such Grantor’s knowledge,
by any other party thereto. Each party to the Assigned Agreements listed on Schedule III
hereto to which such Grantor is a party other than the Grantors has executed and delivered
to such Grantor a consent, in substantially the form of Exhibit C hereto or otherwise in
form and substance satisfactory to the Administrative Agent, to the assignment of the
Agreement Collateral to the Administrative Agent pursuant to this Agreement.

     (i) Such Grantor has no deposit accounts, other than the Account Collateral listed on
Schedule VII hereto, as such Schedule VII may be amended from time to time pursuant to
Section 5(d), and legal, binding and enforceable Account Control Agreements are in effect
for each deposit account that constitutes Account Collateral (other than Account Collateral
consisting

11

 

of
deposit accounts maintained with the Administrative Agent), except to the
extent such Account Control Agreements are not required by Section 5(a). Such Grantor has
instructed all existing Obligors to make all payments to either a Deposit Account or an
Other Deposit Account.

     (j) Such Grantor is not a beneficiary or assignee under any letter of credit, other
than the letters of credit described in Schedule X hereto, as such Schedule X may be amended
from time to time, and legal, binding and enforceable Consents to Assignment of Letter of
Credit Rights, in the form of the Consent to Assignment of Letter of Credit Rights attached
hereto as Exhibit H, are in effect for each Collateral L/C. Such Grantor has instructed all
issuers and nominated persons under any Collateral L/C in which the Grantor is the
beneficiary or assignee to make all payments to either a Deposit Account or an Other Deposit
Account.

     (k) All filings and other actions (including, without limitation, (A) actions necessary
to obtain control of Collateral as provided in Sections 9-104, 9-105, 9-106 and 9-107 of the
UCC and Section 16 of UETA and (B) actions necessary to perfect the Administrative Agent’s
security interest with respect to Collateral evidenced by a certificate of ownership)
necessary to perfect the security interest in the Collateral of such Grantor created under
this Agreement have been duly made or taken and are in full force and effect, and this
Agreement creates in favor of the Administrative Agent for the benefit of the Secured
Parties a valid and, together with such filings and other actions, perfected first priority
security interest in the Collateral of such Grantor, securing the payment of the Secured
Obligations.

     (l) No authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is required for
(i) the grant by such Grantor of the security interest granted hereunder or for the
execution, delivery or performance of this Agreement by such Grantor, (ii) the perfection or
maintenance of the security interest created hereunder (including the first priority nature
of such security interest), except for the filing of financing and continuation statements
under the UCC, the recordation of the Intellectual Property Security Agreements referred to
in Section 14(f) with the U.S. Patent and Trademark Office and the U.S. Copyright Office and
the actions described in Section 4 with respect to Security Collateral, or (iii) the
exercise by the Administrative Agent of its voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this Agreement, except as
may be required in connection with the disposition of any portion of the Security Collateral
by laws affecting the offering and sale of securities generally.

     (m) The Inventory that has been produced or distributed by such Grantor has been
produced in compliance with all requirements of applicable law, including, without
limitation, the Fair Labor Standards Act.

     (n) As to itself and its Intellectual Property Collateral:

     (i) The operation of such Grantor’s business as currently conducted or as
contemplated to be conducted and the use of the Intellectual Property Collateral in
connection therewith, to such Grantor’s knowledge, do not conflict with, infringe,
misappropriate, dilute, misuse or otherwise violate the intellectual property rights
of any third party.

     (ii) Such Grantor is the exclusive owner of all right, title and interest in
and to the Intellectual Property Collateral, and is entitled to use all Intellectual
Property Collateral subject only to the terms of the IP Agreements.

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     (iii) The Intellectual Property Collateral set forth on Schedule VI hereto
includes all of the patents, patent applications, domain names, trademark
registrations and applications, copyright registrations and applications and IP
Agreements owned by such Grantor.

     (iv) The Intellectual Property Collateral is subsisting and has not been
adjudged invalid or unenforceable in whole or part, and to the best of such
Grantor’s knowledge, is valid and enforceable. Such Grantor is not aware of any
uses of any item of Intellectual Property Collateral that could be expected to lead
to such item becoming invalid or unenforceable.

     (v) Such Grantor has made or performed all filings, recordings and other acts
and has paid all required fees and taxes to maintain and protect its interest in
each and every item of Intellectual Property Collateral in full force and effect
throughout the world, and to protect and maintain its interest therein including,
without limitation, recordations of any of its interests in the Patents and
Trademarks with the U.S. Patent and Trademark Office and in corresponding national
and international patent offices, and recordation of any of its interests in the
Copyrights with the U.S. Copyright Office and in corresponding national and
international copyright offices. Such Grantor has used proper statutory notice in
connection with its use of each patent, trademark and copyright in the Intellectual
Property Collateral.

     (vi) No claim, action, suit, investigation, litigation or proceeding has been
asserted or is pending or threatened in writing against such Grantor (i) based upon
or challenging or seeking to deny or restrict the Grantor’s rights in or use of any
of the Intellectual Property Collateral, (ii) alleging that the Grantor’s rights in
or use of the Intellectual Property Collateral or that any services provided by,
processes used by, or products manufactured or sold by, such Grantor infringe,
misappropriate, dilute, misuse or otherwise violate any patent, trademark, copyright
or any other proprietary right of any third party, or (iii) alleging that the
Intellectual Property Collateral is being licensed or sublicensed in violation or
contravention of the terms of any license or other agreement. To such Grantor’s
knowledge, no Person is engaging in any activity that infringes, misappropriates,
dilutes, misuses or otherwise violates the Intellectual Property Collateral or the
Grantor’s rights in or use thereof. Except as set forth on Schedule VI hereto, such
Grantor has not granted any license, release, covenant not to sue, non-assertion
assurance, or other right to any Person with respect to any part of the Intellectual
Property Collateral. The consummation of the transactions contemplated by the
Transaction Documents will not result in the termination or impairment of any of the
Intellectual Property Collateral.

     (vii) With respect to each IP Agreement: (A) such IP Agreement is valid and
binding and in full force and effect and represents the entire agreement between the
respective parties thereto with respect to the subject matter thereof; (B) such IP
Agreement will not cease to be valid and binding and in full force and effect on
terms identical to those currently in effect as a result of the rights and interest
granted herein, nor will the grant of such rights and interest constitute a breach
or default under such IP Agreement or otherwise give any party thereto a right to
terminate such IP Agreement; (C) such Grantor has not received any notice of
termination or cancellation under such IP Agreement; (D) such Grantor has not
received any notice of a breach or default under such IP Agreement, which breach or
default has not been cured; (E) such Grantor has not granted to any other third
party any rights, adverse or otherwise, under such IP

13

 

Agreement; and (F) neither
such Grantor nor any other party to such IP Agreement is in breach or default
thereof in any material respect, and no event has occurred that, with notice or
lapse of time or both, would constitute such a breach or default or permit
termination, modification or acceleration under such IP Agreement.

     (viii) To the best of such Grantor’s knowledge, (A) none of the Trade Secrets
of such Grantor has been used, divulged, disclosed or appropriated to the detriment
of such Grantor for the benefit of any other Person other than such Grantor; (B) no
employee, independent contractor or agent of such Grantor has misappropriated any
trade secrets of any other Person in the course of the performance of his or her
duties as an employee, independent contractor or agent of such Grantor; and (C) no
employee, independent contractor or agent of such Grantor is in default or breach of
any term of any employment agreement, non-disclosure agreement, assignment of
inventions agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of such Grantor’s Intellectual
Property Collateral.

     (ix) No Grantor or Intellectual Property Collateral is subject to any
outstanding consent, settlement, decree, order, injunction, judgment or ruling
restricting the use of any Intellectual Property Collateral or that would impair the
validity or enforceability of such Intellectual Property Collateral.

     (o) The Grantor has no commercial tort claims (as defined in Section 9-102(13) of the
UCC) other than those listed in Schedule IX hereto.

          Section 10. Further Assurances. (a) Each Grantor agrees that from time to time, at
the expense of such Grantor, such Grantor will promptly execute and deliver, or otherwise
authenticate, all further instruments and documents, and take all further action that may be
necessary or desirable, or that the Administrative Agent may request, in order to perfect and
protect any pledge or security interest granted or purported to be granted by such Grantor
hereunder or to enable the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral of such Grantor. Without limiting the generality of the
foregoing, each Grantor will promptly with respect to Collateral of such Grantor: (i) mark
conspicuously each document included in Inventory, each chattel paper included in Receivables, each
Related Contract, each Assigned Agreement and, at the request of the Administrative Agent, each of
its records pertaining to such Collateral with a legend, in form and substance satisfactory to
the Administrative Agent, indicating that such document, chattel paper, Related Contract, Assigned
Agreement or Collateral is subject to the security interest granted hereby; (ii) if any such
Collateral shall be evidenced by a promissory note or other instrument or chattel paper, deliver
and pledge to the Administrative Agent hereunder such note or instrument or chattel paper duly
indorsed and accompanied by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Administrative Agent; (iii) execute or authenticate and file such
financing or continuation statements, or amendments thereto, and such other instruments or notices,
as may be necessary or desirable, or as the Administrative Agent may request, in order to perfect
and preserve the security interest granted or purported to be granted by such Grantor hereunder;
(iv) deliver and pledge to the Administrative Agent for benefit of the Secured Parties certificates
representing Security Collateral that constitutes certificated securities, accompanied by undated
stock or bond powers executed in blank; (v) take all action necessary to ensure that the
Administrative Agent has control of Collateral consisting of deposit accounts, electronic chattel
paper, investment property, letter-of-credit rights and transferable records as provided in
Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and in Section 16 of UETA; (vi) at the request of
the Administrative Agent, take all action to ensure that the Administrative Agent’s security
interest is noted on any certificate of ownership related to any Collateral evidenced by a
certificate of ownership; (vii) at the request of the Administrative Agent, cause the
Administrative Agent to be the beneficiary under

14

 

Collateral L/Cs, with the exclusive right to make
all draws under the Collateral L/Cs, and with all rights of a transferee under Section 5-114(e) of
the UCC; and (viii) deliver to the Administrative Agent evidence that all other action that the
Administrative Agent may deem reasonably necessary or desirable in order to perfect and protect the
security interest created by such Grantor under this Agreement has been taken. From time to time
upon request by the Administrative Agent, each Grantor will, at such Grantor’s expense, cause to be
delivered to the Administrative Agent, for the benefit of the Secured Parties, an opinion of
counsel, from outside counsel reasonably satisfactory to the Administrative Agent, as to such
matters relating to the transactions contemplated hereby as the Administrative Agent may reasonably
request.

          (b) Each Grantor hereby authorizes the Administrative Agent to file one or more financing or
continuation statements, and amendments thereto, including, without limitation, one or more
financing statements indicating that such financing statements cover all assets or all personal
property (or words of similar effect) of such Grantor, in each case without the signature of such
Grantor, and regardless of whether any particular asset described in such financing statements
falls within the scope of the UCC or the granting clause of this Agreement. A photocopy or other
reproduction of this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law. Each Grantor ratifies
its authorization for the Administrative Agent to have filed such financing statements,
continuation statements or amendments filed prior to the date hereof.

          (c) Each Grantor will furnish to the Administrative Agent from time to time statements and
schedules further identifying and describing the Collateral of such Grantor and such other reports
in connection with such Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.

          (d) Within two Business Days after the request of the Administrative Agent, the Borrower shall
open the Collateral Account and the L/C Collateral Account with Deutsche Bank Trust Company
Americas, or such other financial institution as the Administrative Agent may direct.

          Section 11. As to Equipment and Inventory. (a) Each Grantor will keep the Equipment and Inventory of such Grantor (other than
Inventory sold in the ordinary course of business) at the places therefor specified in Section 9(b)
or at such other locations designated by the Grantor by written notice to the Administrative Agent
within 10 days of the placement of any Equipment and Inventory at such other locations. Upon the
giving of such notice, Schedule IV shall be automatically amended to add any new locations
specified in the notice.

          (b) Each Grantor will cause the Equipment of such Grantor to be maintained and preserved in
the same condition, repair and working order as when new, ordinary wear and tear excepted, and in
accordance with any manufacturer’s manual, and will forthwith, or in the case of any loss or damage
to any of such Equipment as soon as practicable after the occurrence thereof, make or cause to be
made all repairs, replacements and other improvements in connection therewith that are necessary or
desirable to such end. Each Grantor will promptly furnish to the Administrative Agent a statement
respecting any loss or damage to any of the Equipment or Inventory of such Grantor.

          (c) Each Grantor will pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including, without limitation, claims
for labor, materials and supplies) against, the Equipment and Inventory of such Grantor, except to
the extent payment thereof is not required by Section 5.01(b) of the Credit Agreement. In
producing its Inventory, each Grantor will comply with all requirements of applicable law,
including, without limitation, the Fair Labor Standards Act.

15

 

          Section 12. Insurance. (a) Each Grantor will, at its own expense, maintain insurance
with respect to the Equipment and Inventory of such Grantor in such amounts, against such risks, in
such form and with such insurers, as shall be satisfactory to the Administrative Agent from time to
time. Each policy of each Grantor for liability insurance shall provide for all losses to be paid
on behalf of the Administrative Agent and such Grantor as their interests may appear, and each
policy for property damage insurance shall provide for all losses (except for losses of less than
$500,000 per occurrence) to be paid directly to the Administrative Agent. Each such policy shall
in addition (i) name such Grantor and the Administrative Agent as insured parties thereunder
(without any representation or warranty by or obligation upon the Administrative Agent) as their
interests may appear, (ii) contain the agreement by the insurer that any loss thereunder shall be
payable to the Administrative Agent notwithstanding any action, inaction or breach of
representation or warranty by such Grantor, (iii) provide that there shall be no recourse against
the Administrative Agent for payment of premiums or other amounts with respect thereto and
(iv) provide that at least 10 days’ prior written notice of cancellation or of lapse shall be given
to the Administrative Agent by the insurer. Each Grantor will, at the request of the
Administrative Agent, duly execute and deliver instruments of assignment of such insurance policies
to comply with the requirements of Section 11 and cause the insurers to acknowledge notice of such
assignment.

          (b) Reimbursement under any liability insurance maintained by any Grantor pursuant to this
Section 12 may be paid directly to the Person who shall have incurred liability covered by such
insurance. In case of any loss involving damage to Equipment or Inventory when subsection (c) of
this Section 12 is not applicable, the applicable Grantor will make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any proceeds of insurance
properly received by or released to such Grantor shall be used by such Grantor, except as otherwise
required hereunder or by the Credit Agreement, to pay or as reimbursement for the costs of such
repairs or replacements.

          (c) So long as no Event of Default shall have occurred and be continuing, all insurance
payments received by the Administrative Agent in connection with any loss, damage or destruction of
any Inventory or Equipment will be released by the Administrative Agent to the applicable
Grantor for the repair, replacement or restoration thereof, subject to such terms and
conditions with respect to the release thereof as the Administrative Agent may reasonably require.
To the extent that (i) the amount of any such insurance payments exceeds the cost of any such
repair, replacement or restoration, or (ii) such insurance payments are not otherwise required by
the applicable Grantor to complete any such repair, replacement or restoration required hereunder,
the Administrative Agent will not be required to release the amount thereof to such Grantor and may
hold or continue to hold such amount in the Collateral Account as additional security for the
Secured Obligations of such Grantor (except that the Administrative Agent will direct the
applicable Pledged Account Bank to release to such Grantor any such amount if and to the extent
that any prepayment of Obligations is required under the Credit Agreement in connection with the
receipt of such amount and such prepayment has been made). Upon the occurrence and during the
continuance of any Event of Default or the actual or constructive total loss (in excess of $500,000
per occurrence) of any Equipment or Inventory, all insurance payments in respect of such Equipment
or Inventory shall be paid to the Administrative Agent and shall, in the Administrative Agent’s
sole discretion, (i) be released to the applicable Grantor to be applied as set forth in the first
sentence of this subsection (c) or (ii) be held as additional Collateral hereunder or applied as
specified in Section 23(b).

          Section 13. Post-Closing Changes; Bailees; Collections on Assigned Agreements, Receivables
and Related Contracts. (a) No Grantor will change its name, type of organization,
jurisdiction of organization, organizational identification number or location from those set forth
in Section 9(a) of this Agreement without first giving at least 30 days’ prior written notice to
the Administrative Agent and taking all action required by the Administrative Agent for the purpose
of perfecting or protecting the security interest granted by this Agreement. No Grantor will
change the

16

 

location of the Equipment and Inventory or the place where it keeps the originals of the
Assigned Agreements and Related Contracts to which such Grantor is a party and all originals of all
chattel paper that evidence Receivables of such Grantor from the locations therefor specified in
Sections 9(a) and 9(b) without first giving the Administrative Agent 30 days’ prior written notice
of such change. No Grantor will become bound by a security agreement authenticated by another
Person (determined as provided in Section 9-203(d) of the UCC) without giving the Administrative
Agent 30 days’ prior written notice thereof and taking all action required by the Administrative
Agent to ensure that the perfection and first priority nature of the Administrative Agent’s
security interest in the Collateral will be maintained. Each Grantor will hold and preserve its
records relating to the Collateral, including, without limitation, the Assigned Agreements and
Related Contracts, and will permit representatives of the Administrative Agent at any time during
normal business hours to inspect and make abstracts from such records and other documents. If the
Grantor does not have an organizational identification number and later obtains one, it will
forthwith notify the Administrative Agent of such organizational identification number.

          (b) If any Collateral of any Grantor is at any time in the possession or control of a
warehouseman, bailee or agent, or if the Administrative Agent so requests such Grantor will (i)
notify such warehouseman, bailee or agent of the security interest created hereunder, (ii) instruct
such warehouseman, bailee or agent to hold all such Collateral solely for the Administrative
Agent’s account subject only to the Administrative Agent’s instructions (which shall permit such
Collateral to be removed by such Grantor in the ordinary course of business until the
Administrative Agent notifies such warehouseman, bailee or agent that an Event of Default has
occurred and is continuing), (iii) use commercially reasonable efforts, to cause such warehouseman,
bailee or agent to authenticate a record acknowledging that it holds possession of such Collateral
for the Administrative Agent’s benefit and shall act solely on the instructions of the
Administrative Agent without the further consent of the Grantor or any other Person, and (iv) make
such authenticated record available to the Administrative Agent.

          (c) Except as otherwise provided in this subsection (c), each Grantor will continue to
collect, at its own expense, all amounts due or to become due such Grantor under the Assigned
Agreements, Receivables and Related Contracts. In connection with such collections, such Grantor
may take (and, at the Administrative Agent’s direction, will take) such action as such Grantor or
the Administrative Agent may deem necessary or advisable to enforce collection of the Assigned
Agreements, Receivables and Related Contracts; provided, however, that the Administrative Agent
shall have the right at any time, upon written notice to such Grantor of its intention to do so, to
notify the Obligors under any Assigned Agreements, Receivables and Related Contracts of the
assignment of such Assigned Agreements, Receivables and Related Contracts to the Administrative
Agent and to direct such Obligors to make payment of all amounts due or to become due to such
Grantor thereunder directly to the Administrative Agent and, upon such notification and at the
expense of such Grantor, to enforce collection of any such Assigned Agreements, Receivables and
Related Contracts, to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done, and to otherwise exercise all rights
with respect to such Assigned Agreements, Receivables and Related Contracts, including, without
limitation, those set forth set forth in Section 9-607 of the UCC. After receipt by any Grantor of
the notice from the Administrative Agent referred to in the proviso to the preceding sentence,
(i) all amounts and proceeds (including, without limitation, instruments) received by such Grantor
in respect of the Assigned Agreements, Receivables and Related Contracts of such Grantor shall be
received in trust for the benefit of the Administrative Agent hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith, but in no event prior to the date on which the
Collateral Account has been opened, paid over to the Administrative Agent in the same form as so
received (with any necessary indorsement) to be deposited in the Collateral Account and either
(A) released to such Grantor on the terms set forth in Section 7 so long as no Event of Default
shall have occurred and be continuing or (B) if any Event of Default shall have occurred and be
continuing, applied as provided in Section 23(b) and (ii) such Grantor will not adjust, settle or
compromise the amount or

17

 

payment of any Receivable or amount due on any Assigned Agreement or
Related Contract, release wholly or partly any Obligor thereof, or allow any credit or discount
thereon. No Grantor will permit or consent to the subordination of its right to payment under any
of the Assigned Agreements, Receivables and Related Contracts to any other indebtedness or
obligations of the Obligor thereof.

          Section 14. As to Intellectual Property Collateral. (a) With respect to each item of
its Intellectual Property Collateral, each Grantor agrees to take, at its expense, all necessary
steps, including, without limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright
Office and any other governmental authority, to (i) maintain the validity and enforceability of
such Intellectual Property Collateral and maintain such Intellectual Property Collateral in full
force and effect, and (ii) pursue the registration and maintenance of each patent, trademark, or
copyright registration or application, now or hereafter included in such Intellectual Property
Collateral of such Grantor, including, without limitation, the payment of required fees and taxes,
the filing of responses to office actions issued by the U.S. Patent and Trademark Office, the U.S.
Copyright Office or other governmental authorities, the filing of applications for renewal or
extension, the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing
of divisional, continuation, continuation-in-part, reissue and renewal applications or extensions,
the payment of maintenance fees and the participation in interference, reexamination, opposition,
cancellation, infringement and misappropriation proceedings. No Grantor shall, without the written
consent of the Administrative Agent, discontinue use of or otherwise abandon any Intellectual
Property Collateral, or abandon any right to file an application for patent, trademark, or
copyright, unless such Grantor shall have previously determined that such use or the pursuit or
maintenance of such Intellectual Property Collateral is no longer desirable in the conduct of such
Grantor’s business and that the loss thereof would not be reasonably likely to have a Material
Adverse Effect, in which case, such Grantor will give prompt notice of any such abandonment to the
Administrative Agent.

          (b) Each Grantor agrees promptly to notify the Administrative Agent if such Grantor becomes
aware (i) that any item of the Intellectual Property Collateral may have become abandoned, placed
in the public domain, invalid or unenforceable, or of any adverse determination or development
regarding such Grantor’s ownership of any of the Intellectual Property Collateral or its right to
register the same or to keep and maintain and enforce the same, or (ii) of any adverse
determination or the institution of any proceeding (including, without limitation, the institution
of any proceeding in the U.S. Patent and Trademark Office or any court) regarding any item of the
Intellectual Property Collateral.

          (c) In the event that any Grantor becomes aware that any item of the Intellectual Property
Collateral is being infringed or misappropriated by a third party, such Grantor shall promptly
notify the Administrative Agent and shall take such actions, at its expense, as such Grantor or the
Administrative Agent deems reasonable and appropriate under the circumstances to protect or enforce
such Intellectual Property Collateral, including, without limitation, suing for infringement or
misappropriation and for an injunction against such infringement or misappropriation.

          (d) Each Grantor shall use proper statutory notice in connection with its use of each item of
its Intellectual Property Collateral. No Grantor shall do or permit any act or knowingly omit to
do any act whereby any of its Intellectual Property Collateral may lapse or become invalid or
unenforceable or placed in the public domain.

          (e) Each Grantor shall take all steps which it or the Administrative Agent deems reasonable
and appropriate under the circumstances to preserve and protect each item of its Intellectual
Property Collateral, including, without limitation, maintaining the quality of any and all products
or services used or provided in connection with any of the Trademarks, consistent with the quality
of the

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products and services as of the date hereof, and taking all steps necessary to ensure that
all licensed users of any of the Trademarks use such consistent standards of quality.

          (f) With respect to its Intellectual Property Collateral, each Grantor agrees to execute or
otherwise authenticate an agreement, in substantially the form set forth in Exhibit F hereto or
otherwise in form and substance satisfactory to the Administrative Agent (an “Intellectual Property
Security Agreement”), for recording the security interest granted hereunder to the Administrative
Agent in such Intellectual Property Collateral with the U.S. Patent and Trademark Office, the U.S.
Copyright Office and any other governmental authorities necessary to perfect the security interest
hereunder in such Intellectual Property Collateral.

          (g) Each Grantor agrees that should it obtain an ownership interest in any item of the type
set forth in Section 1(g) that is not on the date hereof a part of the Intellectual Property
Collateral (“After-Acquired Intellectual Property”) (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such After-Acquired Intellectual Property and, in the
case of trademarks, the goodwill symbolized thereby, shall automatically become part of the
Intellectual Property Collateral subject to the terms and conditions of this Agreement with respect
thereto. Each Grantor shall give prompt written notice to the Administrative Agent identifying the
After-Acquired Intellectual Property, and such Grantor shall execute and deliver to the
Administrative Agent with such written notice, or otherwise authenticate, an agreement
substantially in the form of Exhibit G hereto or otherwise in form and substance satisfactory to
the Administrative Agent (an “IP Security Agreement Supplement”) covering such After-Acquired
Intellectual Property which IP Security Agreement Supplement shall be recorded with the U.S. Patent
and Trademark Office, the U.S. Copyright Office and any other governmental authorities necessary to
perfect the security interest hereunder in such After-Acquired Intellectual Property.

          Section 15. Voting Rights; Dividends; Etc. (a) So long as no Default under Section 6.01(a) or (f) of the Credit Agreement or Event of
Default shall have occurred and be continuing:

     (i) Each Grantor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Security Collateral of such Grantor or any part thereof for any
purpose other than originate Entitlement Orders (as defined in any Securities Account
Control Agreement) with respect to the Securities Account or the Commodity Account; provided
however, that such Grantor will not exercise or refrain from exercising any such right if
such action would have a material adverse effect on the value of the Security Collateral or
any part thereof.

     (ii) Each Grantor shall be entitled to receive and retain any and all dividends,
interest and other distributions paid in respect of the Security Collateral of such Grantor
if and to the extent that the payment thereof is not otherwise prohibited by the terms of
the Loan Documents; provided, however, that any and all

     (A) dividends, interest and other distributions paid or payable other than in
cash in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security Collateral,

     (B) dividends and other distributions paid or payable in cash in respect of any
Security Collateral in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid-in-surplus and

     (C) cash paid, payable or otherwise distributed in respect of principal of, or
in redemption of, or in exchange for, any Security Collateral

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shall be, and shall be forthwith delivered to the Administrative Agent to hold as, Security
Collateral and shall, if received by such Grantor, be received in trust for the benefit of
the Administrative Agent, be segregated from the other property or funds of such Grantor and
be forthwith delivered to the Administrative Agent as Security Collateral in the same form
as so received (with any necessary indorsement).

     (iii) The Administrative Agent will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments as such Grantor may
reasonably request for the purpose of enabling such Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain pursuant to
paragraph (ii) above.

          (b) Upon the occurrence and during the continuance of a Default under Section 6.01(a) or (f)
of the Credit Agreement or an Event of Default:

     (i) All rights of each Grantor (x) to exercise or refrain from exercising the voting
and other consensual rights that it would otherwise be entitled to exercise pursuant to
Section 15(a)(i) shall, upon notice to such Grantor by the Administrative Agent, cease and
(y) to receive the dividends, interest and other distributions that it would otherwise be
authorized to receive and retain pursuant to Section 15(a)(ii) shall automatically cease,
and all such rights shall thereupon become vested in the Administrative Agent, which shall
thereupon have the sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such dividends, interest
and other distributions.

     (ii) All dividends, interest and other distributions that are received by any Grantor
contrary to the provisions of paragraph (i) of this Section 15(b) shall be received in trust
for the benefit of the Administrative Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Administrative Agent as Security Collateral
in the same form as so received (with any necessary indorsement).

     (iii) The Administrative Agent shall be authorized to send to each Securities
Intermediary or Commodity Intermediary as defined in and under any Security Control
Agreement a Notice of Exclusive Control as defined in and under such Security Control
Agreement.

          Section 16. As to the Assigned Agreements. (a) Each Grantor will at its expense:

     (i) perform and observe all terms and provisions of the Assigned Agreements to be
performed or observed by it, maintain the Assigned Agreements to which it is a party in full
force and effect, enforce the Assigned Agreements to which it is a party in accordance with
the terms thereof and take all such action to such end as may be requested from time to time
by the Administrative Agent; and

     (ii) furnish to the Administrative Agent promptly upon receipt thereof copies of all
notices, requests and other documents received by such Grantor under or pursuant to the
Assigned Agreements to which it is a party, and from time to time (A) furnish to the
Administrative Agent such information and reports regarding the Assigned Agreements and such
other Collateral of such Grantor as the Administrative Agent may reasonably request and
(B) upon request of the Administrative Agent make to each other party to any Assigned
Agreement to which it is a party such demands and requests for information and reports or
for action as such Grantor is entitled to make thereunder.

20

 

          (b) Each Grantor agrees that it will not, except to the extent otherwise permitted under the
Credit Agreement:

     (i) cancel or terminate any Assigned Agreement to which it is a party or consent to or
accept any cancellation or termination thereof;

     (ii) amend, amend and restate, supplement or otherwise modify any such Assigned
Agreement or give any consent, waiver or approval thereunder;

     (iii) waive any default under or breach of any such Assigned Agreement; or

     (iv) take any other action in connection with any such Assigned Agreement that would
impair the value of the interests or rights of such Grantor thereunder or that would impair
the interests or rights of any Secured Party.

          (c) Each Grantor hereby consents on its behalf and on behalf of its Subsidiaries to the
assignment and pledge to the Administrative Agent for benefit of the Secured Parties of each
Assigned Agreement to which it is a party by any other Grantor hereunder.

          Section 17. Payments Under the Assigned Agreements. (a) Each Grantor agrees, and has effectively so instructed each other party to each
Assigned Agreement to which it is a party, that all payments due or to become due under or in
connection with such Assigned Agreement will be made directly to a Deposit Account.

          (b) All moneys received or collected pursuant to subsection (a) above shall be (i) released to
the applicable Grantor on the terms set forth in Section 7 so long as no Default under Section
6.01(a) or (f) of the Credit Agreement or Event of Default shall have occurred and be continuing or
(ii) if any Default under Section 6.01(a) or (f) of the Credit Agreement or Event of Default shall
have occurred and be continuing, applied as provided in Section 23(b).

          Section 18. As to Letter-of-Credit Rights. (a) Each Grantor, by granting a security
interest in its Receivables consisting of letter-of-credit rights to the Administrative Agent,
intends to (and hereby does) assign to the Administrative Agent its rights (including its
contingent rights) to the proceeds of all Related Contracts consisting of letters of credit of
which it is or hereafter becomes a beneficiary or assignee. Each Grantor will promptly cause the
issuer of each Collateral L/C and each nominated person (if any) with respect thereto to consent to
such assignment of the proceeds thereof in substantially the form of the Consent to Assignment of
Letter of Credit Rights attached hereto as Exhibit H or otherwise in form and substance
satisfactory to the Administrative Agent and deliver written evidence of such consent to the
Administrative Agent.

          (b) Upon the occurrence of a Default under Section 6.01(a) or (f) of the Credit Agreement or
Event of Default, each Grantor will, promptly upon request by the Administrative Agent, (i) notify
(and such Grantor hereby authorizes the Administrative Agent to notify) the issuer and each
nominated person with respect to each of the Related Contracts consisting of Collateral L/Cs and
any payments due or to become due in respect thereof are to be made directly to the Administrative
Agent or its designee and (ii) arrange for the Administrative Agent to become the transferee
beneficiary of the Collateral L/Cs.

          Section 19. Transfers and Other Liens; Additional Shares. (a) Each Grantor agrees
that it will not (i) sell, assign or otherwise dispose of, or grant any option with respect to, any
of the Collateral, other than sales, assignments and other dispositions of Collateral, and options
relating to

21

 

Collateral, permitted under the terms of the Credit Agreement, or (ii) create or suffer
to exist any Lien upon or with respect to any of the Collateral of such Grantor except for the
pledge, assignment and security interest created under this Agreement and Permitted Liens.

          (b) In the case where a subsidiary of a Loan Party is the issuer of Pledged Equity each
Grantor agrees that it will (i) cause each issuer of the Pledged Equity pledged by such Grantor not
to issue any Equity Interests or other securities in addition to or in substitution for the Pledged
Equity issued by such issuer, except to such Grantor, and (ii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all additional Equity Interests or other
securities.

          Section 20. Administrative Agent Appointed Attorney-in-Fact. Each Grantor hereby
irrevocably appoints the Administrative Agent such Grantor’s attorney-in-fact, with full authority
in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to
time, upon the occurrence and during the continuance of a Default, in the Administrative Agent’s
discretion, to take any action and to execute any instrument that the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including, without limitation:

     (a) to obtain and adjust insurance required to be paid to the Administrative Agent
pursuant to Section 12,

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

     (c) to receive, indorse and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a) or (b) above, and

     (d) to file any claims or take any action or institute any proceedings that the
Administrative Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce compliance with the terms and conditions of any Assigned
Agreement or the rights of the Administrative Agent with respect to any of the Collateral.

          Section 21. Administrative Agent May Perform. If any Grantor fails to perform any
agreement contained herein, the Administrative Agent may, but without any obligation to do so and
without notice, itself perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by such Grantor under
Section 24.

          Section 22. The Administrative Agent’s Duties. (a) The powers conferred on the
Administrative Agent hereunder are solely to protect the Secured Parties’ interest in the
Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe
custody of any Collateral in its possession and the accounting for moneys actually received by it
hereunder, the Administrative Agent shall have no duty as to any Collateral, as to ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not any Secured Party has or is deemed to have knowledge of
such matters, or as to the taking of any necessary steps to preserve rights against any parties or
any other rights pertaining to any Collateral. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in its possession if
such Collateral is accorded treatment substantially equal to that which it accords its own
property.

22

 

          (b) Anything contained herein to the contrary notwithstanding, the Administrative Agent may
from time to time, when the Administrative Agent deems it to be necessary, appoint one or more
subagents (each a “Subagent”) for the Administrative Agent hereunder with respect to all or any
part of the Collateral. In the event that the Administrative Agent so appoints any Subagent with
respect to any Collateral, (i) the assignment and pledge of such Collateral and the security
interest granted in such Collateral by each Grantor hereunder shall be deemed for purposes of this
Security Agreement to have been made to such Subagent, in addition to the Administrative Agent, for
the ratable benefit of the Secured Parties, as security for the Secured Obligations of such
Grantor, (ii) such Subagent shall automatically be vested, in addition to the Administrative Agent,
with all rights, powers, privileges, interests and remedies of the Administrative Agent hereunder
with respect to such Collateral, and (iii) the term “Administrative Agent,” when used herein in
relation to any rights, powers, privileges, interests and remedies of the Administrative Agent with
respect to such Collateral, shall include such Subagent; provided, however, that no such Subagent
shall be authorized to take any action with respect to any such Collateral unless and except to the
extent expressly authorized in writing by the Administrative Agent.

          Section 23. Remedies. If any Event of Default shall have occurred and be continuing:

     (a) The Administrative Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party upon default under the UCC (whether or not the UCC applies
to the affected Collateral) and also may: (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of the Administrative Agent
forthwith, assemble all or part of the Collateral as directed by the Administrative Agent
and make it available to the Administrative Agent at a place and time to be designated by
the Administrative Agent that is reasonably convenient to both parties; (ii) without notice
except as specified below, sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Administrative Agent’s offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Administrative Agent may
deem commercially reasonable; (iii) occupy any premises owned or leased by any of the
Grantors where the Collateral or any part thereof is assembled or located for a reasonable
period in order to effectuate its rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv) exercise any and all
rights and remedies of any of the Grantors under or in connection with the Collateral, or
otherwise in respect of the Collateral, including, without limitation, (A) any and all
rights of such Grantor to demand or otherwise require payment of any amount under, or
performance of any provision of, the Assigned Agreements, the Receivables, the Related
Contracts and the other Collateral, (B) withdraw, or cause or direct the withdrawal, of all
funds with respect to the Account Collateral and (C) exercise all other rights and remedies
with respect to the Assigned Agreements, the Receivables, the Related Contracts and the
other Collateral, including, without limitation, those set forth in Section 9-607 of the
UCC. Each Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten 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
Administrative Agent shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it was so
adjourned.

     (b) Any cash held by or on behalf of the Administrative Agent and all cash proceeds
received by or on behalf of the Administrative Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may, in the discretion of
the Administrative

23

 

Agent, be held by the Administrative Agent as collateral for, and/or then
or at any time thereafter applied (after payment of any amounts payable to the
Administrative Agent pursuant to Section 24) in whole or in part by the Administrative Agent
for the ratable benefit of the Secured Parties against, all or any part of the Secured
Obligations, in the following manner:

     (i) first, paid to the Administrative Agent for any amounts then owing to the
Administrative Agent pursuant to Section 9.04 of the Credit Agreement or otherwise
under the Loan Documents; and

     (ii) second, ratably (A) paid to the Lender Parties and the Hedge Banks,
respectively, for any amounts then owing to them, in their capacities as such, under
the Loan Documents ratably in accordance with such respective amounts then owing to
such Lender Parties and the Hedge Banks, provided that, for purposes of this Section
23, the amount owing to any such Hedge Bank pursuant to any Secured Hedge Agreement
to which it is a party (other than any amount therefore accrued and unpaid) shall be
deemed to be equal to the Agreement Value therefor and (B) deposited as Collateral
in the L/C Collateral Account up to an amount equal to 100% of the aggregate Available
Amount of all outstanding Letters of Credit, provided that in the event that any
such Letter of Credit is drawn, the Administrative Agent shall pay to the Issuing
Bank that issued such Letter of Credit the amount held in the L/C Collateral Account
in respect of such Letter of Credit, provided further that, to the extent that any
such Letter of Credit shall expire or terminate undrawn and as a result thereof the
amount of the Collateral in the L/C Collateral Account shall exceed 100% of the
aggregate Available Amount of all then outstanding Letters of Credit, such excess
amount of such Collateral shall be applied in accordance with the remaining order of
priority set out in this Section 23(b).

Any surplus of such cash or cash proceeds held by or on the behalf of the Administrative
Agent and remaining after payment in full of all the Secured Obligations shall be paid over
to the applicable Grantor or to whomsoever may be lawfully entitled to receive such surplus.

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

     (d) The Administrative Agent may, without notice to any Grantor except as required by
law and at any time or from time to time, charge, set-off and otherwise apply all or any
part of the Secured Obligations against any funds held with respect to the Account
Collateral or in any other deposit account.

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

24

 

          Section 24. Indemnity and Expenses. (a) Each Grantor agrees to indemnify, defend and
save and hold harmless each Secured Party and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and
against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of or in connection
with or resulting from this Agreement (including, without limitation, enforcement of this
Agreement), except to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party’s gross negligence or willful misconduct.

          (b) Each Grantor will upon demand pay to the Administrative Agent the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and expenses of its counsel
and of any experts and agents, that the Administrative Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral of such Grantor, (iii) the
exercise or enforcement of any of the rights of the Administrative Agent or the other Secured Parties
hereunder or (iv) the failure by such Grantor to perform or observe any of the provisions hereof.

          Section 25. Amendments; Waivers; Additional Grantors; Etc. (a) No amendment or
waiver of any provision of this Agreement, and no consent to any departure by any Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed by the
Administrative Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in exercising any right
hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any other right.

          (b) Upon the execution and delivery, or authentication, by any Person of a security agreement
supplement in substantially the form of Exhibit A hereto (each a “Security Agreement Supplement”),
(i) such Person shall be referred to as an “Additional Grantor” and shall be and become a Grantor
hereunder, and each reference in this Agreement and the other Loan Documents to “Grantor” shall
also mean and be a reference to such Additional Grantor, and each reference in this Agreement and
the other Loan Documents to “Collateral” shall also mean and be a reference to the Collateral of
such Additional Grantor, and (ii) the supplemental schedules I-IX attached to each Security
Agreement Supplement shall be incorporated into and become a part of and supplement Schedules I-IX,
respectively, hereto, and the Administrative Agent may attach such supplemental schedules to such
Schedules; and each reference to such Schedules shall mean and be a reference to such Schedules as
supplemented pursuant to each Security Agreement Supplement.

          Section 26. Notices, Etc. All notices and other communications provided for hereunder
shall be either (i) in writing (including telegraphic, telecopier or telex communication) and
mailed, telegraphed, telecopied, telexed or otherwise delivered or (ii) by electronic mail (if
electronic mail addresses are designated as provided below) confirmed immediately in writing, in
the case of the Borrower or the Administrative Agent, addressed to it at its address specified in
the Credit Agreement and, in the case of each Grantor other than the Borrower, addressed to it at
its address specified in the Credit Agreement or on the signature page to the Security Agreement
Supplement pursuant to which it became a party hereto; or, as to any party, at such other address
as shall be designated by such party in a written notice to the other parties. All such notices
and other communications shall, when mailed, telegraphed, telecopied, telexed, sent by electronic
mail or otherwise, be effective when deposited in the mails, delivered to the telegraph company,
telecopied, confirmed by telex answerback, sent by electronic mail and confirmed in writing, or
otherwise delivered (or confirmed by a signed receipt), respectively,

25

 

addressed as aforesaid;
except that notices and other communications to the Administrative Agent shall not be effective
until received by the Administrative Agent. Delivery by telecopier of an executed counterpart of
any amendment or waiver of any provision of this Agreement or of any Security Agreement Supplement
or Schedule hereto shall be effective as delivery of an original executed counterpart thereof.

          Section 27. Continuing Security Interest; Assignments under the Credit Agreement.
This Agreement shall create a continuing security interest in the Collateral and shall (a) remain
in full force and effect until the latest of (i) the payment in full in cash of the Secured
Obligations, (ii) the Termination Date and (iii) the termination or expiration of all Letters of
Credit and all Secured Hedge Agreements, (b) be binding upon each Grantor, its successors and
assigns and (c) inure, together with the rights and remedies of the Administrative Agent hereunder,
to the benefit of the Secured
Parties and their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitments, the Advances owing to it and the Note or Notes,
if any, held by it) to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Lender Party herein or otherwise, in each case
as provided in Section 8.07 of the Credit Agreement.

          Section 28. Release; Termination. (a) Upon any sale, lease, transfer or other
disposition of any item of Collateral of any Grantor in accordance with the terms of the Loan
Documents (other than sales of Inventory in the ordinary course of business), the Administrative
Agent will, at such Grantor’s expense, execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby; provided, however, that (i) at the time of such
request and such release no Default shall have occurred and be continuing, (ii) such Grantor shall
have delivered to the Administrative Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release describing the item of Collateral and the terms of
the sale, lease, transfer or other disposition in reasonable detail, including, without limitation,
the price thereof and any expenses in connection therewith, together with a form of release for
execution by the Administrative Agent and a certificate of such Grantor to the effect that the
transaction is in compliance with the Loan Documents and as to such other matters as the
Administrative Agent may request and (iii) the proceeds of any such sale, lease, transfer or other
disposition required to be applied, or any payment to be made in connection therewith, in
accordance with Section 2.06 of the Credit Agreement shall, to the extent so required, be paid or
made to, or in accordance with the instructions of, the Administrative Agent when and as required
under Section 2.06 of the Credit Agreement.

          (b) Upon the latest of (i) the payment in full in cash of the Secured Obligations, (ii) the
Termination Date and (iii) the termination or expiration of all Letters of Credit and all Secured
Hedge Agreements, the pledge and security interest granted hereby shall terminate and all rights to
the Collateral shall revert to the applicable Grantor. Upon any such termination, the
Administrative Agent will, at the applicable Grantor’s expense, execute and deliver to such Grantor
such documents as such Grantor shall reasonably request to evidence such termination.

          Section 29. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, 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. Delivery of an executed counterpart of
a signature page to this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.

26

 

          Section 30. The Mortgages. In the event that any of the Collateral hereunder is also
subject to a valid and enforceable Lien under the terms of any Mortgage and the terms of such
Mortgage are inconsistent with the terms of this Agreement, then with respect to such Collateral,
the terms of such Mortgage shall be controlling in the case of fixtures and real estate leases,
letting and licenses of, and contracts and agreements relating to the lease of, real property, and
the terms of this Agreement shall be controlling in the case of all other Collateral.

          Section 31. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the
State of New York.

[Signature Pages Follow]

27

 

          IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered
by its officer thereunto duly authorized as of the date first above written.

	 	 	 	 	 	 	 
	 	 	GRUBB & ELLIS COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS AFFILIATES, INC.

	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS MANAGEMENT SERVICES, INC.

	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS OF ARIZONA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS ASSET SERVICES COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS CONSULTING SERVICES COMPANY

	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

28

 

	 	 	 	 	 	 	 
	 	 	GRUBB & ELLIS INSTITUTIONAL PROPERTIES, INC.

	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS OF MICHIGAN, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS MORTGAGE GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS OF NEVADA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS NEW YORK, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS ADVISERS OF CALIFORNIA, INC.

	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

29

 

	 	 	 	 	 	 	 
	 	 	GRUBB & ELLIS SOUTHEAST PARTNERS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HSM INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WM. A. WHITE/GRUBB & ELLIS INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	LANDAUER HOSPITALITY INTERNATIONAL, INC.

	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	LANDAUER SECURITIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GRUBB & ELLIS MANAGEMENT SERVICES OF MICHIGAN,
INC.

	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

30

 

	 	 	 	 	 	 	 
	 	 	NNN REALTY ADVISORS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	TRIPLE NET PROPERTIES LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	TRIPLE NET PROPERTIES REALTY INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	NNN RESIDENTIAL MANAGEMENT INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

31exv4w3

 

Exhibit 4.3

Form of Subscription Agreement

SUBSCRIPTION AGREEMENT

                          , 2007

Gentlemen:

     The undersigned (the “Investor”) hereby confirms its agreement with you as follows:

     1. This Subscription Agreement (this “Agreement”) is made as of the date set forth below
between Polymedix, Inc., a Delaware corporation (the “Company”), and the Investor.

     2. The Company has authorized the sale and issuance to certain investors of up to an
aggregate of                      units (the “Units”), each consisting of (i)            shares (each a “Share” and
collectively, the “Shares”) of its common stock, par value $0.001 per share (the “Common Stock”), and (ii) warrants (“Warrant,”
collectively, the “Warrants”) to purchase      shares of Common Stock
(and the fractional amount being the “Warrant Ratio”), subject to adjustment by the Company’s Board
of Directors, or a committee thereof, for a purchase price of $           per Unit (the “Purchase
Price”). The Shares issuable upon exercise of the Warrants are referred to herein as “Warrant
Shares” and, together with the Units, the Shares and the Warrants, are collectively referred to
herein as the “Securities.”

     3. The offering and sale of the Units (the “Offering”) is being made pursuant to (1) an
effective Registration Statement on Form SB-2 (Registration No. 333-146180) (filed by the Company
with the Securities and Exchange Commission (the
“Commission”)) (the “Registration
Statement”), (2) if applicable, certain “free
writing prospectuses” (as that term is defined in Rule 405 under the
Securities Act of 1933, as amended), that have or will be filed with the Commission and delivered
to the Investor on or prior to the date hereof, (3) a preliminary prospectus dated December 13, 2007
(the “Preliminary Prospectus”), and (4) a final prospectus (together with the Preliminary
Prospectus, the “Prospectus”) containing certain supplemental information regarding the Units and
terms of the Offering that will be filed with the Commission and delivered to the Investor (or made
available to the Investor by the filing by the Company of an electronic version thereof with the
Commission) along with the Company’s counterpart to this Agreement.

     4. The Company and the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor the Units set forth below for the aggregate purchase
price set forth below. The Units shall be purchased pursuant to the Terms and Conditions for
Purchase of Units attached hereto as Annex I and incorporated herein by this reference as if fully
set forth herein. The Investor acknowledges that the Offering is not being underwritten by the
placement agent (the “Placement Agent”) named in the Prospectus Supplement and that there is no
minimum offering amount.

     5. The manner of settlement of the Shares included in the Units purchased by the Investor
shall be determined by such Investor as follows:

 

 

Delivery by electronic book-entry at The Depository Trust Company (“DTC”), registered in the
Investor’s name and address as set forth below, and released by The American Stock Transfer
& Trust Company, the Company’s transfer agent (the “Transfer Agent”) (attention:
                     (     )      -          ), to the Investor at the Closing (as defined in Section 3.1 of
Annex A hereto). NO LATER THAN TWO (2) BUSINESS DAYS AFTER THE EXECUTION OF THIS AGREEMENT
BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

	 	(I)	 	DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH
THE SHARES ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN (“DWAC”)
INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES, AND
	 
	 	(II)	 	REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE
PRICE FOR THE UNITS BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT:
	 
	 	 	 	[PYMX wire instructions here]

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER
ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DWAC IN A TIMELY
MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE UNITS OR DOES NOT
MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE UNITS MAY NOT BE DELIVERED AT
CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING ALTOGETHER.

     6. The executed Warrant shall be delivered in accordance with the terms set forth in Annex I
hereto.

     7. The Investor represents that, except as set forth below, (a) it has had no position, office
or other material relationship within the past three years with the Company or persons known to it
to be affiliates of the Company, (b) it is not a NASD member or an Associated Person (as such term
is defined under the NASD Membership and Registration Rules Section 1011) as of the Closing, and
(c) neither the Investor nor any group of Investors (as identified in a public filing made with the
Commission) of which the Investor is a part in connection with the Offering of the Units, acquired,
or obtained the right to acquire, 20% or more of the Common Stock (or securities convertible into
or exercisable for Common Stock) or the voting power of the Company on a post-transaction basis.
Exceptions: (If no exceptions, write “none.” If left blank, response will be deemed to be
“none.”)

     8. The Investor represents that it has received or can obtain on the SEC’s Edgar filing system
the Prospectus, which is part of the Company’s Registration Statement, the Preliminary Prospectus,
the documents incorporated by reference therein, and any free writing

2

 

prospectus (collectively, the “Disclosure Package”), prior to or in connection with the
receipt of this Agreement along with the Company’s counterpart to this Agreement.

     9. No offer by the Investor to buy Units will be accepted and no part of the Purchase Price
will be delivered to the Company until the Company has accepted such offer by countersigning a copy
of this Agreement, and any such offer may be withdrawn or revoked, without obligation or commitment
of any kind, at any time prior to the Company (or a Placement Agent on behalf of the Company)
sending (in writing, facsimile or by electronic mail) notice of its acceptance of such offer. An
indication of interest will involve no obligation or commitment of any kind until this Agreement is
accepted and countersigned by or on behalf of the Company.

          Number of Units:

          Purchase Price Per Unit: $

          Aggregate Purchase Price: $

3

 

     Please confirm that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.

	 	 	 	 	 
	 	 	Dated as of:                           , 2007
	 
	 	 	 	 
	 	 	 
	 

	 	INVESTOR	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Print Name:  	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

Agreed and Accepted this _____ day of _______________, 2007:

	 	 	 	 	 
	POLYMEDIX, INC.	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	Title:
	 	 

4

 

ANNEX I

TERMS AND CONDITIONS FOR PURCHASE OF UNITS

     1. Authorization and Sale of the Units; Defined Terms.

          1.1 Subject to the terms and conditions of this Agreement, the Company has authorized the sale
of the Units.

          1.2 Capitalized terms used herein but not otherwise defined have the meanings ascribed to them
in the Agreement.

     2. Agreement to Sell and Purchase the Units; Placement Agent.

          2.1 At the Closing (as defined in Section 3.1), the Company will sell to the Investor, and the
Investor will purchase from the Company, upon the terms and conditions set forth herein, the number
of Units set forth on the last page of the Agreement to which these Terms and Conditions for
Purchase of Units are attached as Annex I (the “Signature Page”) for the aggregate purchase price
therefor set forth on the Signature Page.

          2.2 The Company proposes to enter into substantially this same form of Subscription Agreement
with certain other investors (the “Other Investors”) and expects to complete sales of Units to
them. The Investor and the Other Investors are hereinafter sometimes collectively referred to as
the “Investors,” and this Agreement and the Subscription Agreements executed by the Other Investors
are hereinafter sometimes collectively referred to as the “Agreements.”

          2.3 Investor acknowledges that the Company intends to pay Rodman & Renshaw, LLC (the
“Placement Agent”) a fee (the “Placement Fee”) in respect of the sale of Units to the Investor.

          2.4 The Company has entered into a Placement Agency Agreement, dated December      , 2007 (the
“Placement Agreement”), with the Placement Agent that contains certain representations, warranties,
covenants, and agreements of the Company that may be relied upon by the Investor, which shall be a
third party beneficiary thereof. A copy of the Placement Agreement is available upon request.

     3. Closings and Delivery of the Units and Funds.

          3.1 Closing. The completion of the purchase and sale of the Units (the “Closing”) shall occur
at a place and time (the “Closing Date”) to be specified by the Company and the Placement Agent,
and of which the Investors will be notified in advance by the Placement Agent, in accordance with
Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
At the Closing, (a) the Company shall cause the Transfer Agent to deliver to the Investor the
number of Shares set forth on the Signature Page registered in the name of the Investor or, if so
indicated on the Investor Questionnaire attached hereto as Schedule A, in the name of a nominee
designated by the Investor and as contemplated

Annex I- Page 1

 

by procedures set forth in the Agreement and the Placement Agreement, (b) the Company shall
cause to be delivered to the Investor a Warrant to purchase a number of whole Warrant Shares
determined by multiplying the number of Shares set forth on the signature page by the Warrant Ratio
and rounding down to the nearest whole number and (c) the aggregate purchase price for the Units
being purchased by the Investor will be delivered by or on behalf of the Investor to the Company.

          3.2 (a) Conditions to the Company’s Obligations. The Company’s obligation to issue and sell
the Units to the Investor shall be subject to: (i) the receipt by the Company of the purchase price
for the Units being purchased hereunder as set forth on the Signature Page and (ii) the accuracy of
the representations and warranties made by the Investor and the fulfillment of those undertakings
of the Investor to be fulfilled prior to the Closing Date.

               (b) Conditions to the Investor’s Obligations. The Investor’s obligation to purchase the Units
will be subject to the accuracy of the representations and warranties made by the Company contained
in the Placement Agreement and the fulfillment of those undertakings of the Company to be fulfilled
prior to the Closing Date those contained in the Placement Agreement and the Subscription
Agreement, and to the condition that the Placement Agent shall not have determined that the
conditions to the closing in the Placement Agreement have not been satisfied. The Investor’s
obligations are expressly not conditioned on the purchase by any or all of the Other Investors of
the Units that they have agreed to purchase from the Company or the issuance of any minimum amount
of Units by the Company.

          3.3 Delivery of Funds. No later than two (2) business days after the execution of this
Agreement by the Investor and the Company, the Investor shall remit by wire transfer the amount
of funds equal to the aggregate purchase price for the Units being purchased by the Investor to the
following account designated by the Company:

     [PYMX wire instructions here]

          3.4 Delivery of Shares by Electronic Book-Entry at The Depository Trust Company. No later
than two (2) business days after the execution of this Agreement by the Investor and the
Company, the Investor shall direct the broker-dealer at which the account or accounts to be
credited with the Shares being purchased by such Investor are maintained, which broker/dealer shall
be a DTC participant, to set up a Deposit/Withdrawal at Custodian (“DWAC”) instructing The American
Stock Transfer & Trust Company, the Company’s transfer agent, to credit such account or accounts
with the Shares by means of an electronic book-entry delivery. Such DWAC shall indicate the
settlement date for the deposit of the Shares, which date shall be provided to the Investor by the
Placement Agent. Simultaneously with the delivery to the Company by the Investor of the funds
pursuant to Section 3.3 above, the Company shall direct its transfer agent to credit the Investor’s
account or accounts with the Shares pursuant to the information contained in the DWAC.

     4. Representations, Warranties and Covenants of the Investor.

          4.1 The Investor represents and warrants to, and covenants with, the Company that (a) the
Investor has answered all questions on the Signature Page and the Investor

Annex I- Page 2

 

Questionnaire for use in preparation of the Prospectus Supplement and the answers thereto are
true and correct as of the date hereof and will be true and correct as of the Closing Date and (b)
the Investor, in connection with its decision to purchase the number of Units set forth on the
Signature Page, is relying only upon the Disclosure Package and the representations and warranties
of the Company contained herein and the Placement Agency Agreement.

          4.2 The Investor acknowledges, represents and agrees that no action has been or will be taken
in any jurisdiction outside the United States by the Company or the Placement Agent that would
permit an offering of the Units, or possession or distribution of offering materials in connection
with the issue of the Units in any jurisdiction outside the United States where action for that
purpose is required. Each Investor outside the United States will comply with all applicable laws
and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers Units
or has in its possession or distributes any offering material, in all cases at its own expense.
The Placement Agent is not authorized to make and have not made any representation or use of any
information in connection with the issue, placement, purchase and sale of the Units, except as set
forth or incorporated by reference in the Disclosure Package.

          4.3 The Investor further represents and warrants to, and covenants with, the Company that (a)
the Investor has full right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (b) this Agreement constitutes a valid
and binding obligation of the Investor enforceable against the Investor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights
generally and except as enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law) and except as the
indemnification agreements of the Investors herein may be legally unenforceable.

          4.4 The Investor understands that nothing in this Agreement, the Prospectus or any other
materials presented to the Investor in connection with the purchase and sale of the Units
constitutes legal, tax or investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Units.

          4.5 Each Investor represents, warrants and agrees that, since the earlier to occur of (i) the
date on which the Placement Agent first contacted such Investor about the Offering and (ii) the
date of this Agreement, it has not engaged in any transactions in the securities of the Company
(including, without limitation, any Short Sales involving the Company’s securities). Each Investor
covenants that it will not engage in any transactions in the securities of the Company (including
Short Sales) prior to the time that the transactions contemplated by this Agreement have been
consummated and are publicly disclosed. Each Investor agrees that it will not use any of the Units
acquired pursuant to this Agreement to cover any short position in the Common Stock if doing so
would be in violation of applicable securities laws. For purposes hereof, “Short Sales” include,
without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under
the Exchange Act, whether or not against the box, and all types of direct and indirect stock
pledges, forward sales contracts, options, puts,

Annex I- Page 3

 

calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the
Exchange Act) and similar arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated brokers.

     5. Survival of Representations, Warranties and Agreements; Third Party Beneficiary.
Notwithstanding any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company and the Investor
herein will survive the execution of this Agreement, the delivery to the Investor of the Units
being purchased and the payment therefor. The Placement Agent shall be a third party beneficiaries
with respect to representations, warranties and agreements of the Investor in Section 4 hereof.

     6. Notices. All notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International Federal Express or
facsimile, and will be deemed given (i) if delivered by first-class registered or certified mail
domestic, three business days after so mailed, (ii) if delivered by nationally recognized overnight
carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two
business days after so mailed and (iv) if delivered by facsimile, upon electric confirmation of
receipt and will be delivered and addressed as follows:

(a)  if to the Company, to:

Polymedix, Inc.

170 N. Radnor-Chester Road

Suite 300

Radnor, Pennsylvania 19087

Facsimile: (484) 598-2333

Attention: Edward F. Smith, Chief Financial Officer

with copies to:

Pepper Hamilton, LLP

400 Berwyn Park

899 Cassatt Avenue

Berwyn, Pennsylvania 19312

Attention: Jeffrey P. Libson

Facsimile: (610) 640-7835

                    (b) if to the Investor, at its address on the Signature Page hereto, or at such other address
or addresses as may have been furnished to the Company in writing.

     7. Changes. This Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.

Annex I- Page 4

 

     8. Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this Agreement.

     9. Severability. In case any provision contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein will not in any way be affected or impaired thereby.

     10. Governing Law. This Agreement will be governed by, and construed in accordance with, the
internal laws of the State of New York, without giving effect to the principles of conflicts of law
that would require the application of the laws of any other jurisdiction.

     11. Counterparts. This Agreement may be executed in two or more counterparts, each of which
will constitute an original, but all of which, when taken together, will constitute but one
instrument, and will become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties. The Company and the Investor acknowledge and agree that
the Company shall deliver its counterpart to the Investor along with the Prospectus and the
Prospectus Supplement (or the filing by the Company of an electronic version thereof with the
Commission).

     12. Confirmation of Sale. The Investor acknowledges and agrees that such Investor’s receipt
of the Company’s counterpart to this Agreement, together with the Prospectus and the Prospectus
Supplement (or the filing by the Company of an electronic version thereof with the Commission),
shall constitute written confirmation of the Company’s sale of Units to such Investor.

     13. Termination. In the event that the Company decides to terminate Offering prior to
Closing, this Agreement shall terminate without any further action on the part of the parties
hereto and any monies remitted to the Company will be promptly refunded by the Company,
without interest, to the Investor.

Annex I- Page 5

 

SCHEDULE A TO ANNEX I

POLYMEDIX, INC.

INVESTOR QUESTIONNAIRE

Pursuant to Section 3 of Annex I to the Agreement, please provide us with the following
information:

	 	1.	 	The exact name that your Shares and Warrants are to be registered in. You may
use a nominee name if appropriate:
	 
	 	 	 	                                                                                
                    
	 
	 	 	 	                                                                                
                    
	 
	 	2.	 	The relationship between the Investor and the registered holder listed in
response to item 1 above:
	 
	 	 	 	                                                                                
                    
	 
	 	 	 	                                                                                
                    
	 
	 	3.	 	The mailing address of the registered holder listed in response to item 1
above:
	 
	 	 	 	                                                                                
                    
	 
	 	 	 	                                                                                
                    
	 
	 	 	 	                                                                                
                    
	 
	 	4.	 	The Social Security Number or Tax Identification Number of the registered
holder listed in the response to item 1 above:
	 
	 	 	 	                                                                                
                    
	 
	 	5.	 	Name of DTC Participant (broker-dealer at which the account or accounts to be
credited with the Shares are maintained); please include the name and telephone number
of the contract person at the broker-dealer:
	 
	 	 	 	                                                                                
                    
	 
	 	 	 	                                                                                
                    
	 
	 	 	 	                                                                                
                    
	 
	 	 	 	                                                                                
                    

Schedule A to Annex I- Page 1

 

	 	6.	 	DTC Participant Number:
	 
	 	 	 	                                                                                
                    
	 
	 	7.	 	Name of Account at DTC Participant being credited with the Shares:
	 
	 	 	 	                                                                                
                    
	 
	 	 	 	                                                                                
                    
	 
	 	8.	 	Account Number at DTC Participant being credited with the Shares:
	 
	 	 	 	                                                                                
                    

Schedule A to Annex I- Page 2

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