Document:

exv10w3

Exhibit 10.3

      

SECURITY AGREEMENT

by

SOLUTIA INC.

and

THE SUBSIDIARIES PARTY HERETO,

as Grantors,

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Collateral Agent

 

Dated as of March 17, 2010

      

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I

	 
	 	 	 	 
	DEFINITIONS

	 
	 	 	 	 
	SECTION 1.01. Uniform Commercial Code Defined Terms
	 	 	2	 
	SECTION 1.02. Credit Agreement Defined Terms
	 	 	2	 
	SECTION 1.03. Definition of Certain Terms Used Herein
	 	 	2	 
	SECTION 1.04. Interpretation
	 	 	7	 
	SECTION 1.05. Resolution of Drafting Ambiguities
	 	 	7	 
	SECTION 1.06. Perfection Certificate
	 	 	7	 
	 
	 	 	 	 
	ARTICLE II

	 
	 	 	 	 
	SECURITY INTERESTS

	 
	 	 	 	 
	SECTION 2.01. Grant of Security Interest
	 	 	7	 
	SECTION 2.02. No Assumption of Liability
	 	 	8	 
	 
	 	 	 	 
	ARTICLE III

	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES

	 
	 	 	 	 
	SECTION 3.01. Title and Authority
	 	 	8	 
	SECTION 3.02. Filings
	 	 	9	 
	SECTION 3.03. Validity of Security Interests
	 	 	9	 
	SECTION 3.04. Limitations on and Absence of Other Liens
	 	 	9	 
	SECTION 3.05. Other Actions
	 	 	10	 
	SECTION 3.06. Condition and Maintenance of Equipment
	 	 	12	 
	 
	 	 	 	 
	ARTICLE IV

	 
	 	 	 	 
	COVENANTS

	 
	 	 	 	 
	SECTION 4.01. Change of Name; Location of Collateral; Records; Place of Business
	 	 	12	 
	SECTION 4.02. Protection of Security
	 	 	13	 
	SECTION 4.03. Further Assurances
	 	 	13	 
	SECTION 4.04. Inspection and Verification
	 	 	13	 
	SECTION 4.05. Taxes; Encumbrances
	 	 	14	 
	SECTION 4.06. Assignment of Security Interest
	 	 	14	 
	SECTION 4.07. Continuing Obligations of the Grantors
	 	 	14	 
	SECTION 4.08. Use and Disposition of Collateral
	 	 	14	 
	SECTION 4.09. Insurance
	 	 	14	 
	SECTION 4.10. Certain Covenants and Provisions Regarding Patent, Trademark and Copyright
Collateral
	 	 	14	 

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	 	 	Page	 
	SECTION 4.11. Certain Covenants and Provisions Regarding Receivables
	 	 	17	 
	 
	 	 	 	 
	ARTICLE V

	 
	 	 	 	 
	REMEDIES

	 
	 	 	 	 
	SECTION 5.01. Remedies upon Default
	 	 	18	 
	SECTION 5.02. Notice of Sale
	 	 	20	 
	SECTION 5.03. Waiver of Notice and Claims
	 	 	20	 
	SECTION 5.04. Certain Sales of Collateral
	 	 	21	 
	SECTION 5.05. No Waiver; Cumulative Remedies
	 	 	22	 
	SECTION 5.06. Certain Additional Actions Regarding Intellectual Property
	 	 	22	 
	SECTION 5.07. Application of Proceeds
	 	 	22	 
	SECTION 5.08. Collateral Agent’s Calculations
	 	 	23	 
	 
	 	 	 	 
	ARTICLE VI

	 
	 	 	 	 
	The Collateral Agent

	 
	 	 	 	 
	SECTION 6.01. General Authority of the Collateral Agent over the Collateral
	 	 	23	 
	SECTION 6.02. Exercise of Powers
	 	 	24	 
	SECTION 6.03. Remedies Not Exclusive
	 	 	24	 
	SECTION 6.04. Waiver and Estoppel
	 	 	24	 
	SECTION 6.05. Limitation on Collateral Agent’s Duty in Respect of Collateral
	 	 	25	 
	SECTION 6.06. Limitation by Law
	 	 	25	 
	SECTION 6.07. Rights of Secured Parties in Respect of Obligations
	 	 	25	 
	SECTION 6.08. Compensation and Expenses
	 	 	25	 
	SECTION 6.09. Stamp and Other Similar Taxes
	 	 	25	 
	SECTION 6.10. Filing Fees, Excise Taxes, etc
	 	 	26	 
	SECTION 6.11. Indemnification
	 	 	26	 
	 
	 	 	 	 
	ARTICLE VII

	 
	 	 	 	 
	MISCELLANEOUS

	 
	 	 	 	 
	SECTION 7.01. Notices
	 	 	26	 
	SECTION 7.02. Survival of Agreement
	 	 	26	 
	SECTION 7.03. Binding Effect
	 	 	26	 
	SECTION 7.04. GOVERNING LAW
	 	 	27	 
	SECTION 7.05. Waivers; Amendment; Several Agreement
	 	 	27	 
	SECTION 7.06. WAIVER OF JURY TRIAL
	 	 	27	 
	SECTION 7.07. Severability
	 	 	27	 
	SECTION 7.08. Counterparts
	 	 	28	 
	SECTION 7.09. Headings
	 	 	28	 
	SECTION 7.10. Jurisdiction; Consent to Service of Process
	 	 	28	 
	SECTION 7.11. Termination
	 	 	28	 
	SECTION 7.12. Additional Grantors
	 	 	29	 

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	 	 	Page	 
	SECTION 7.13. Financing Statements
	 	 	29	 
	SECTION 7.14. Collateral Agent Appointed Attorney-in-Fact
	 	 	30	 
	SECTION 7.15. Intercreditor Agreement
	 	 	31	 
	SECTION 7.16. Mortgages
	 	 	31	 
	SECTION 7.17. Conflicts
	 	 	31	 

SCHEDULES

			
	Schedule I	 	Subsidiary Guarantors

ANNEXES

			
	Annex I	 	Form of Joinder Agreement

			
	Annex II	 	Form of Perfection Certificate

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SECURITY AGREEMENT

     SECURITY AGREEMENT (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, this “Agreement”) dated as of March 17, 2010 among SOLUTIA
INC., a Delaware corporation (the “Borrower”), each Subsidiary of the Borrower listed on
Schedule I hereto (collectively, together with each Subsidiary that becomes a party hereto
pursuant to Section 7.12 of this Agreement, the “Subsidiary Guarantors” and, together with
the Borrower, the “Grantors”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, as collateral
agent (in such capacity, together with its successors in such capacity, the “Collateral
Agent”) for the Secured Parties (as defined in the Credit Agreement referred to below).

R E C I T A L S

     A. The Borrower, the Collateral Agent, Deutsche Bank Trust Company Americas, as administrative
agent (in such capacity and together with any successors in such capacity, the “Administrative
Agent”) for the Lenders (as defined herein), the lending institutions from time to time party
thereto (the “Lenders”) and the other agents party thereto have entered into that certain
Credit Agreement, dated as of the date hereof (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”), providing
for the making of Loans to the Borrower and the issuance of Letters of Credit pursuant to, and upon
the terms and subject to the conditions specified in, the Credit Agreement.

     B. Each Subsidiary Guarantor has, pursuant to the Guarantee Agreement, dated as of the date
hereof, among other things, unconditionally guaranteed the obligations of the Borrower under the
Credit Agreement.

     C. The Borrower and each Subsidiary Guarantor will receive substantial benefits from the
execution, delivery and performance of the obligations of the Borrower under the Credit Agreement
and are, therefore, willing to enter into this Agreement.

     D. Contemporaneously with the execution and delivery of this Agreement, the Borrower and
Subsidiary Guarantors have executed and delivered to the Collateral Agent a Pledge Agreement (as
amended, restated, amended and restated, supplemented or otherwise modified from time to time, the
“Pledge Agreement”).

     E. This Agreement is given by each Grantor in favor of the Collateral Agent for the benefit of
the Secured Parties to secure the payment and performance of all of the Obligations (as hereinafter
defined).

     NOW THEREFORE, in consideration of the foregoing and other benefits accruing each Grantor, the
receipt and sufficiency of which are hereby acknowledged, each Grantor and the Collateral Agent
hereby agree as follows:

 

 

ARTICLE I

DEFINITIONS

     SECTION 1.01. Uniform Commercial Code Defined Terms. Unless otherwise defined herein, terms
used herein that are defined in the UCC shall have the meanings assigned to them in the UCC,
including the following which are capitalized herein:

     “Account Debtor”; “Accounts”; “Bank”; “Certificates of
Title”; “Chattel Paper”; “Commercial Tort Claim”; “Commodity
Account”; “Commodity Contract”; “Commodity Intermediary”; “Deposit
Accounts”; “Documents”; “Electronic Chattel Paper”; “Entitlement
Holder”, “Entitlement Order”; “Equipment”; “Fixtures”;
“General Intangibles”; “Goods”; “Instruments” (as defined in Article
9 rather than Article 3); “Inventory”; “Investment Property”;
“Letter-of-Credit Rights”; “Letters of Credit”; “Money”;
“Proceeds”; “Records”; “Securities Account”; “Securities
Intermediary”; “Security Entitlement”; “Supporting Obligations”; and
“Tangible Chattel Paper”.

     SECTION 1.02. Credit Agreement Defined Terms. Capitalized terms used but not otherwise
defined herein that are defined in the Credit Agreement shall have the meanings given to them in
the Credit Agreement.

     SECTION 1.03. Definition of Certain Terms Used Herein. As used herein, the following terms
shall have the following meanings:

     “Accounts Receivable” shall mean all Accounts and all right, title and interest in any
returned goods, together with all rights, titles, securities and guarantees with respect thereto,
including any rights to stoppage in transit, replevin, reclamation and resales, and all related
security interests, liens and pledges, whether voluntary or involuntary, in each case whether now
existing or owned or hereafter arising or acquired.

     “Agreement” shall have the meaning assigned to such term in the Preamble of this
Agreement.

     “Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”,
as now and hereinafter in effect, or any successor statute.

     “Books and Records” shall mean all instruments, files, Records, ledger sheets and
documents.

     “Borrower” shall have the meaning assigned to such term in the Preamble of this
Agreement.

     “Charges” shall mean any and all property and other taxes, assessments and special
assessments, levies, fees and all governmental charges imposed upon or assessed against, and all
claims (including, without limitation, landlords’, carriers’, mechanics’, maritime, workmen’s,
repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claims arising
by operation of law) against, all or any portion of the Collateral.

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     “Collateral” shall have the meaning assigned to such term in Section 2.01.

     “Collateral Agent” shall have the meaning assigned to such term in the Preamble of
this Agreement.

     “Collateral Agent Fees” shall mean all fees, costs and expenses of the Collateral
Agent of the types described in Sections 6.08, 6.09, 6.10 and 6.11.

     “Collateral Estate” shall have the meaning assigned to such term in Section 6.01(c).

     “Collateral Support” shall mean all property (real or personal) assigned, hypothecated
or otherwise securing any Collateral and shall include any security agreement or other agreement
granting a lien or security interest in such real or personal property.

     “Copyrights” shall mean all U.S. and foreign copyrights (whether registered or
unregistered and whether published or unpublished) and all mask works (as such term is defined in
17 U.S.C. Section 901, et seq.), together with any and all (i) registrations and applications
therefor, including those listed on Schedule 13(b) of the Perfection Certificate, (ii)
rights arising under applicable law with respect thereto, (iii) renewals and extensions thereof,
(iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable with
respect thereto, including damage awards and payments for past, present or future infringements or
other violations thereof and (v) rights to sue for past, present or future infringements thereof.

     “Credit Agreement” shall have the meaning assigned to such term in the Recitals of
this Agreement.

     “Distribution Date” shall mean each date fixed by the Collateral Agent in its sole
discretion for a distribution to the Secured Parties of funds held by the Collateral Agent for the
benefit of the Secured Parties.

     “Excluded Account” shall mean (i) any deposit account(s) used solely as a payroll,
trust, employee benefit, tax or other fiduciary account and any zero balance accounts, (ii) any
escrow account that is holding funds solely for the benefit of third parties and (iii) the deposit
account in connection with the Pledge Agreement, dated as of June 1, 2009, among the Borrower and
Citibank, N.A.

     “Excluded Property” shall mean:

     (a) any permit, lease, license, contract, instrument, security, franchise or other
document, held by any Grantor that validly prohibits the creation by such Grantor of a
security interest therein or thereon (other than to the extent that any such prohibition
would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC
(or any successor provision or provisions) of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity);

     (b) any permit, lease, license, contract, instrument, security, franchise or other
document, or the assets subject thereto or covered thereby, held by any Grantor to the
extent that any Requirement of Law applicable thereto prohibits the creation of a security

-3-

 

interest therein or thereon (other than to the extent that any such prohibition would
be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other applicable law
(including the Bankruptcy Code) or principles of equity);

     (c) goods owned by any Grantor on the date hereof or hereafter acquired that are
subject to a Lien securing a purchase money obligation (as defined in the UCC) or Capital
Lease Obligation permitted to be incurred pursuant to the provisions of Section 6.01(vi) of
the Credit Agreement if the contract or other agreement in which such Lien is granted (or
the documentation providing for such purchase money obligation or Capital Lease Obligation)
validly prohibits the creation of any other Lien on such Goods;

     (d) any Collateral consisting of Intellectual Property (i) in which the grant by a
Grantor of a security interest therein is prohibited or would result in the voiding or
cancellation of such Intellectual Property without the consent of a third party or by
Requirement of Law or (ii) including any Trademark application filed in the United States
Patent and Trademark Office on the basis of such Grantor’s “intent-to-use” such Trademark,
unless and until acceptable evidence of use of the Trademark has been filed with and duly
accepted by the United States Patent and Trademark Office pursuant to Section 1(c) or 1(d)
of the Lanham Act (at which time such Trademark application will no longer be considered
Excluded Property), in each case, other than to the extent that any such prohibition would
be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other applicable law
(including the Bankruptcy Code) or principles of equity);

     (e) Securities Collateral (as defined in the Pledge Agreement) and the Equity Interests
and debt securities excluded from the definition of “Securities Collateral” in the Pledge
Agreement;

     (f) any issued and outstanding shares of voting stock of any Subsidiary of a Grantor
organized under the laws of a Non-U.S. Jurisdiction that is expressly excluded from the
pledge contained in any Non-U.S. Pledge Agreement;

     (g) motor vehicles and other assets subject to certificates of title;

     (h) any Equity Interests or debt securities owned by such Grantor if and to the extent
that the grant of the security interest shall, after giving effect to Sections 9-406, 9-407,
9-408 or 9-409 of the UCC (or any successor provision or provisions) or any other applicable
law, (A) except in the case of a Wholly Owned Subsidiary, constitute or result in the
abandonment, invalidation or unenforceability of any right, title or interest of such
Grantor therein, (B) except in the case of a Wholly Owned Subsidiary, constitute or result
in a breach or termination pursuant to the terms of, or a default under, any such Equity
Interest or debt securities, (C) be void or illegal under any applicable governmental law,
rule or regulation, or (D) except in the case of a Wholly Owned Subsidiary, be prohibited by
(i) the organizational documents of the issuer of such Equity Interests or debt securities
or (ii) agreements among the equity holders of the issuer of such Equity Interests or debt
securities, in each case, as in effect on the Effective Date;

-4-

 

     (i) any Commercial Tort Claim with a value of less than $500,000; and

     (j) any Excluded Accounts;

provided that the term “Excluded Property” shall not include any Proceeds, substitutions or
replacements of any Excluded Property (unless such Proceeds, substitutions or replacements would
constitute Excluded Property).

     “Grantors” shall have the meaning assigned to such term in the Preamble of this
Agreement.

     “Intellectual Property” shall mean, collectively, with respect to any Grantor, all
intellectual and similar property rights of every kind and nature, whether arising under United
States, multinational or foreign laws or otherwise, including Patents, Copyrights, Trademarks,
Trade Secrets, intangible rights in software and databases not otherwise included in the foregoing,
and the right to sue or otherwise recover for any past, present and future infringement, dilution,
misappropriation, or other violation or impairment thereof, including the right to receive all
proceeds therefrom.

     “Intellectual Property Licenses” shall mean, collectively, with respect to each
Grantor, all agreements pursuant to which such Grantor receives or grants any right in, to, or
under Intellectual Property, including license agreements, distribution agreements and covenants
not to sue (regardless of whether such agreements and covenants are contained within an agreement
that also covers other matters, such as development or consulting) with respect to any Patent,
Trademark, Copyright, Trade Secrets or other Intellectual Property, whether such Grantor is a
licensor or licensee, distributor or distributee under any such agreement, including those listed
on Schedules 13(a) and 13(b) of the Perfection Certificate, together with any and
all (i) amendments, renewals, extensions, supplements and continuations thereof, and (ii) income,
fees, royalties, damages, claims and payments now and hereafter due and/or payable thereunder and
with respect thereto including damages and payments for past, present or future infringements or
violations thereof.

     “Lenders” shall have the meaning assigned to such term in the Recitals of this
Agreement.

     “Patents” shall mean, collectively, all United States and foreign patents, patent
applications, certificates of inventions, and industrial designs, together with any and all (i)
rights arising under applicable law with respect to any of the foregoing, (ii) inventions and
improvements described and claimed therein, (iii) reissues, divisions, continuations extensions and
continuations-in-part thereof and amendments thereto, (iv) income, fees, royalties, damages, claims
and payments now or hereafter due and/or payable thereunder and with respect thereto including
damages and payments for past, present or future infringements or other violations thereof and (v)
rights to sue for past, present or future infringements or other violations thereof.

     “Perfection Certificate” shall mean a certificate substantially in the form of
Annex II hereto, completed and supplemented with the schedules and attachments contemplated
thereby, and duly executed by the Grantors.

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     “Pledge Agreement” shall have the meaning assigned to such term in the Recitals of
this Agreement.

     “Pledged Securities” shall have the meaning assigned to such term in the Pledge
Agreement and shall include Equity Interests pledged pursuant to Non-U.S. Pledge Agreements.

     “Receivables” shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment
Intangibles, (iv) General Intangibles, (v) Instruments and (vi) all other rights to payment,
whether or not earned by performance, for goods or other property sold, leased, licensed, assigned
or otherwise disposed of, or services rendered or to be rendered, regardless of how classified
under the UCC together with all of Grantors’ rights, if any, in any goods or other property giving
rise to such right to payment to the extent not constituting Excluded Property and all Collateral
Support and Supporting Obligations related thereto and all Records relating thereto.

     “Securities Collateral” shall have the meaning assigned to such term in the Pledge
Agreement.

     “Security Interests” shall have the meaning assigned to such term in Section 2.01.

     “Subsidiary Guarantors” shall have the meaning assigned to such term in the Preamble
of this Agreement.

     “Trademarks” shall mean, collectively, all United States, state, and foreign
trademarks, service marks, slogans, logos, certification marks, trade dress, Internet domain
names, corporate names, trade names, and other source or business identifiers, whether registered
or unregistered (whether statutory or common law and whether established or registered in the
United States or any other country or any political subdivision thereof), together with any and all
(i) registrations and applications for any of the foregoing, including those listed on Schedule
13(a) of the Perfection Certificate, (ii) goodwill connected with the use thereof and
symbolized thereby, (iii) rights arising under applicable law with respect to the use of any of the
foregoing, (iv) renewals thereof and amendments thereto, (v) income, fees, royalties, damages and
payments now and hereafter due and/or payable thereunder and with respect thereto, including
damages, claims and payments for past, present or future infringements, dilutions or other
violations thereof and (vi) rights to sue for past, present and future infringements, dilutions or
other violations thereof.

     “Trade Secrets” shall mean all trade secrets and all other confidential or proprietary
information and know-how, whether or not such information has been reduced to a writing or other
tangible form, together with all (i) rights arising under applicable law with respect to the use of
any of the foregoing, (ii) income, fees, royalties, damages and payments now and hereafter due
and/or payable thereunder and with respect thereto, including damages, claims and payments for
past, present or future misappropriation or other violations thereof and (iii) rights to sue for
past, present and future misappropriation or other violations thereof.

     “UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in the
State of New York; provided, however, that if by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of the Collateral Agent’s and the Secured
Parties’ security interest in any item or portion of the Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC”
shall mean

-6-

 

the Uniform Commercial Code as in effect on the date hereof in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or priority and for
purposes of definitions relating to such provisions.

     SECTION 1.04. Interpretation. The rules of interpretation specified in the Credit Agreement
(including Section 1.03 thereof) shall be applicable to this Agreement.

     SECTION 1.05. Resolution of Drafting Ambiguities. Each Grantor acknowledges and agrees that
it was represented by counsel in connection with the execution and delivery hereof, that it and its
counsel reviewed and participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the drafting party (i.e.,
the Collateral Agent) shall not be employed in the interpretation hereof.

     SECTION 1.06. Perfection Certificate. The Collateral Agent and each Grantor agree that the
Perfection Certificate and all schedules, amendments and supplements thereto are and shall at all
times remain a part of this Agreement.

ARTICLE II

SECURITY INTERESTS

     SECTION 2.01. Grant of Security Interest. As collateral security for the payment and
performance in full of all the Obligations, each Grantor hereby pledges and grants to the
Collateral Agent, for the benefit of the Secured Parties, a lien on and security interest in and to
all of the right, title and interest of such Grantor in, to and under the following property,
wherever located, and whether now existing or hereafter arising or acquired from time to time
(collectively, the “Collateral”):

     (a) Accounts Receivable;

     (b) Books and Records;

     (c) Money and Deposit Accounts;

     (d) Chattel Paper;

     (e) Commercial Tort Claims described on Schedule 14 to the Perfection
Certificate (as such schedule may be amended or supplemented from time to time);

     (f) Documents;

     (g) Equipment;

     (h) Fixtures;

     (i) General Intangibles (including Intellectual Property and Intellectual Property
Licenses);

-7-

 

     (j) Goods;

     (k) Instruments;

     (l) Inventory;

     (m) Investment Property;

     (n) Supporting Obligations; and

     (o) all other personal property of such Grantor, whether tangible or intangible, and
all Proceeds and products of each of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of, each of the foregoing, any and all
Proceeds of any insurance, indemnity, warranty or guaranty payable to such Grantor from time
to time with respect to any of the foregoing.

     Notwithstanding anything to the contrary contained in clauses (a) through (o) above, (x) the
security interest created by this Agreement shall not extend to, and the term “Collateral” shall
not include, any Excluded Property and (y) from and after the Effective Date, no Grantor shall
permit to become effective in any document creating, governing or providing for any permit, license
or agreement a provision that would prohibit the creation of a Lien on such permit, license or
agreement in favor of the Collateral Agent unless such prohibition is permitted under Section 6.09
of the Credit Agreement.

     The Liens granted hereunder to secure the Obligations are collectively referred to herein as
the “Security Interests”.

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

ARTICLE III

REPRESENTATIONS AND WARRANTIES

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

     SECTION 3.01. Title and Authority. Each Grantor has good and valid rights in and title (or
right to use in the case of Intellectual Property) to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant hereto and to execute, deliver
and perform its obligations in accordance with the terms of this Agreement, without the consent or
approval of any other Person other than any consent or approval which has been obtained.

-8-

 

     SECTION 3.02. Filings. (a) All information set forth herein as of the date hereof and in the
Perfection Certificate as of the date hereof, including the Schedules annexed hereto and thereto,
has been duly prepared, completed and executed and the information set forth herein and therein is
correct and complete in all material respects. The Collateral described on the Schedules annexed
to the Perfection Certificate constitutes all of the property of such type of Collateral owned or
held by the Grantors to the extent required to be scheduled thereon. Fully completed and, to the
extent necessary or appropriate, duly executed UCC financing statements (including fixture filings,
as applicable) or other appropriate filings, recordings or registrations containing a description
of the Collateral have been delivered to the Collateral Agent for filing in each governmental,
municipal or other office specified in Schedule 7 to the Perfection Certificate, which are
all the filings, recordings and registrations (along with the concurrent payment of any applicable
taxes or filing fees) that are necessary to publish notice of and protect the validity of and to
establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the
benefit of the Secured Parties) in respect of all Collateral in which a security interest may be
perfected by filing, recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions (provided that additional filings may be
required to perfect the security interest in any Patents, Trademarks and Copyrights acquired after
the date hereof), and no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration under Article 9 of the UCC is necessary in any such jurisdiction,
except as provided under applicable law with respect to the filing of continuation statements.

     (a) Each Grantor represents and warrants that a fully executed security agreement in the form
hereof (or short form security agreements in a form reasonably satisfactory to the Collateral
Agent) identifying all Collateral consisting of (x) United States issued Patents and Patent
applications and United States registered Trademarks and Trademarks applications, in each case,
owned by such Grantor, have been delivered contemporaneously with the execution of this Agreement
to the Collateral Agent for recordation with the United States Patent and Trademark Office, and (y)
United States registered Copyrights and Copyright applications owned by such Grantor have been
delivered contemporaneously with the execution of this Agreement to the Collateral Agent for
registration with the United States Copyright Office.

     SECTION 3.03. Validity of Security Interests. This Agreement creates legal and valid security
interests in all the Collateral securing the payment and performance of the Obligations;
provided, however, that, for the avoidance of doubt, the foregoing representation
shall not be made with respect to, or construed in accordance with, the laws of any jurisdiction
other than the United States, any State thereof or the District of Columbia. The Security
Interests are and shall be prior to any other Lien on any of the Collateral, other than Permitted
Liens.

     SECTION 3.04. Limitations on and Absence of Other Liens. The Collateral is owned by the
Grantors or the Grantors have rights therein, free and clear of any Lien, except for Permitted
Liens. The Grantors have not filed or consented to the filing of (a) any financing statement or
analogous document under the UCC or any other applicable laws covering any Collateral, (b) any
assignment in which any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with the United States Patent and Trademark Office and the
United States Copyright Office or (c) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Collateral with any foreign governmental,
municipal or other office, which financing statement or analogous

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document, assignment, security agreement or similar instrument is still in effect, except, in
each case, for filings required under this Agreement or any other Loan Document, Permitted Liens or
filings as to which a duly authorized termination statement relating to such financing statement or
other instrument has been delivered to the Collateral Agent on the Effective Date.

     SECTION 3.05. Other Actions. In order to further ensure the attachment, perfection and
priority of, and the ability of the Collateral Agent to enforce, preserve and protect, the
Collateral Agent’s security interests in the Collateral, each Grantor hereby represents and
warrants as follows and agrees, in each case at such Grantor’s own expense, to take the following
actions with respect to the following Collateral:

     (a) Instruments and Tangible Chattel Paper. As of the date hereof, (x) each Instrument
representing indebtedness between or among the Grantors or owed to any Grantor by any of the
Borrower’s other Restricted Subsidiaries and (y) each other Instrument and each other item
of Tangible Chattel Paper specified in Schedule 12 to the Perfection Certificate
valued in excess of $500,000 has been properly endorsed, assigned and delivered to the
Collateral Agent, and, if necessary, accompanied by instruments of transfer or assignment
duly executed in blank; provided, that, to the extent that any such Instrument
constitutes an Intercompany Note and to the extent that any Grantor is required hereunder to
deliver any such Intercompany Note to the Collateral Agent for purposes of possession, such
Grantor’s obligations hereunder with respect to such delivery shall be deemed satisfied by
the delivery to the Collateral Agent of the Master Intercompany Note. If any amount
individually or in the aggregate in excess of $500,000 payable under or in connection with
any of the Collateral shall be evidenced by any Instrument or Tangible Chattel Paper, the
Grantor acquiring such Instrument or Tangible Chattel Paper shall notify the Collateral
Agent and, on each date on which financial statements are required to be delivered under
Section 5.01(a) or (b) of the Credit Agreement, endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in
blank as the Collateral Agent may from time to time reasonably request; provided,
however, that so long as no Event of Default shall have occurred and be continuing,
the Collateral Agent shall return such Instrument or Tangible Chattel Paper to such Grantor
from time to time, to the extent necessary for collection in the ordinary course of such
Grantor’s business.

     (b) Investment Property. (i) Each Grantor hereby represents and warrants that it does
not hold, own or have any interest in any certificated securities or uncertificated
securities other than those constituting Securities Collateral under the Pledge Agreement
and those not required to be pledged pursuant to the terms of the Pledge Agreement or this
Agreement. If any Grantor shall at any time hold or acquire any certificated securities
constituting Investment Property (other than any Excluded Property) valued in excess of
$500,000 that are not Pledged Securities under the Pledge Agreement, such Grantor shall, on
each date on which financial statements are required to be delivered under Section 5.01(a)
or (b) of the Credit Agreement, endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment duly executed in blank, all
in form and substance reasonably satisfactory to the Collateral Agent. If any securities
now or hereafter acquired by any Grantor constituting Investment Property (other than any
Excluded Property) that are not Pledged Securities are

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uncertificated, such Grantor shall promptly notify the Collateral Agent thereof and use
its commercially reasonable efforts to, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, cause the issuer to agree to comply with
instructions from the Collateral Agent as to such securities, without further consent of any
Grantor.

     (i) Each Grantor shall promptly pay all Charges and fees with respect to the Investment
Property pledged by it under this Agreement; provided that no Grantor shall be
required to pay any such Charge or fee that is being contested in good faith and by proper
proceedings diligently conducted, which proceedings have the effect of preventing the
forfeiture or sale of such Investment Property, if it has maintained adequate reserves with
respect thereto in accordance with and to the extent required by GAAP and such failure to
pay could not reasonably be expected to have a Material Adverse Effect; provided,
further, that no Liens shall be permitted to exist, directly or indirectly, on any
Investment Property other than Liens in favor of the Collateral Agent and Permitted Liens.
In the event any Grantor shall fail to make such payment contemplated in the immediately
preceding sentence (except to the extent any Grantor is contesting such Charges and fees in
good faith), the Collateral Agent may upon written notice to such Grantor, do so for the
account of such Grantor and the Grantors shall promptly reimburse and indemnify the
Collateral Agent from all reasonable costs and expenses incurred by the Collateral Agent
under this Section 3.05(c).

     (c) Electronic Chattel Paper and Transferable Records. If any amount individually or
in the aggregate in excess of $500,000 payable under or in connection with any of the
Collateral shall be evidenced by any Electronic Chattel Paper or any “transferable record,”
as that term is defined in Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in
effect in any relevant jurisdiction, the Grantor acquiring such Electronic Chattel Paper or
transferable record shall, on each date on which financial statements are required to be
delivered under Section 5.01(a) or (b) of the Credit Agreement, notify the Collateral Agent
and take such action as the Collateral Agent may reasonably request in writing to vest in
the Collateral Agent control under UCC Section 9-105 of such Electronic Chattel Paper or
control under Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act,
as so in effect in such jurisdiction, of such transferable record.

     (d) Intellectual Property. (i) Schedules 13(a) and (b) of the
Perfection Certificate set forth a true and complete list of (A) all United States
registrations of and applications for Patents, Trademarks, and Copyrights owned by such
Grantor as of the date hereof and (B) to the best of each Grantor’s knowledge, all material
know-how and patent Intellectual Property Licenses currently in effect; (ii) such Grantor is
the owner of the entire right, title, and interest in and to all U.S. Intellectual Property
listed on Schedule 13(a) of the Perfection Certificate, and such Grantor owns or has
the valid right to use all other Intellectual Property used in the conduct of its business,
free and clear of all Liens, claims, encumbrances, and licenses, except for Permitted Liens,
and except as could not be reasonably expected to have a Material Adverse Effect; (iii) all
Intellectual Property

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listed on Schedule 13(a) of the Perfection Certificate is subsisting and such
Grantor has performed all acts and has paid all renewal, maintenance, and other fees and
taxes required to maintain such Intellectual Property in full force and effect except as may
be permitted under Section 4.10(f) and except as could not be reasonably expected to have a
Material Adverse Effect; (iv) to the best of such Grantor’s knowledge, all Intellectual
Property owned by such Grantor is valid and enforceable, and no holding, decision, or
judgment has been rendered in any action or proceeding before any court or administrative
authority challenging the validity of, such Grantor’s right to register, or such Grantor’s
rights to own or use, any such Intellectual Property and no such action or proceeding is
pending or, to the best of such Grantor’s knowledge, threatened, except as could not be
reasonably expected to have a Material Effect; (v) to the best of such Grantor’s knowledge,
the conduct of such Grantor’s business does not infringe upon or otherwise violate any
Intellectual Property right of any third party except as could not reasonably be expected to
have a Material Adverse Effect; (vi) to the best of each Grantor’s knowledge, no third party
is infringing upon or otherwise violating any rights in any Intellectual Property owned or
used by such Grantor, or any of its respective licensees except as could not reasonably be
expected to have a Material Adverse Effect; (vii) no settlement or consents, covenants not
to sue, non-assertion assurances, or releases have been entered into by such Grantor or to
which such Grantor is bound adversely affect Grantor’s rights to own or use any Intellectual
Property that is material to the business of such Grantor as currently conducted, except as
could not be reasonably expected to have a Material Adverse Effect; and (viii) such Grantor
has not made a previous assignment, sale, transfer or agreement constituting a present or
future assignment, sale, transfer or agreement of any material Intellectual Property owned
by such Grantor that has not been terminated or released.

     (e) Commercial Tort Claims. As of the date hereof, each Grantor hereby represents and
warrants that it holds no Commercial Tort Claims other than those listed in Schedule
14 to the Perfection Certificate. If any Grantor shall at any time hold or acquire a
Commercial Tort Claim having a value of $500,000, such Grantor shall, on each date on which
financial statements are required to be delivered under Section 5.01(a) or (b) of the Credit
Agreement, notify the Collateral Agent in writing signed by such Grantor of the brief
details thereof and grant to the Collateral Agent in such writing a security interest
therein and in the Proceeds thereof, all upon the terms of this Agreement, with such writing
to be in form and substance reasonably satisfactory to the Collateral Agent.

     SECTION 3.06. Condition and Maintenance of Equipment. The Equipment of the Grantors, taken as
a whole, is in good repair, operating order and condition, ordinary wear and tear, casualty and
condemnation excepted. Each Grantor will maintain its Equipment in accordance with Section 5.03 of
the Credit Agreement.

ARTICLE IV

COVENANTS

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

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     (a) Each Grantor shall comply with the provisions of Section 5.07 of the Credit Agreement.

     (b) Each Grantor agrees to maintain, at its own cost and expense, records which are complete
and accurate in all material respects with respect to the Collateral owned by it and to permit the
Collateral Agent to examine its records in accordance with Section 5.05 of the Credit Agreement.

     SECTION 4.02. Protection of Security. Except to the extent otherwise permitted by the Credit
Agreement, each Grantor shall, at its own cost and expense, defend title to the Collateral pledged
by it hereunder and the security interest therein and Lien thereon granted to the Collateral Agent
and the priority thereof against all claims and demands of all Persons at any time claiming any
interest therein adverse to the Collateral Agent or any other Secured Party other than Permitted
Liens. Except as permitted by the Credit Agreement and except for restrictions in agreements
entered into in the ordinary course of business with respect to Intellectual Property, which
restrictions would not, individually or in the aggregate, have a Material Adverse Effect on the
business of any Grantor, there is no agreement, order, judgment or decree, and no Grantor shall
enter into any agreement or take any other action, that would restrict the transferability of any
of the Collateral or otherwise materially impair or conflict with such Grantor’s obligations or the
rights of the Collateral Agent hereunder.

     SECTION 4.03. Further Assurances. Each Grantor agrees, at its own expense, to promptly
execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents
and take all such further actions as the Collateral Agent may reasonably request for the purpose of
obtaining or to preserve, protect and perfect the Security Interests in the United States and the
rights and remedies created hereby and the rights and powers herein granted, including the payment
of any fees and taxes required in connection with the execution and delivery of this Agreement, the
granting of the Security Interests and the filing of any financing or continuation statement
required under the UCC (or other similar laws) in effect in the United States with respect to the
security interest created hereby. In the event that the Collateral Agent desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth in this Agreement and
determines it reasonably necessary to obtain any approvals or consent of any Governmental Authority
or any other Person therefor, then, upon request of the Collateral Agent, each Grantor agrees to
use its commercially reasonable efforts to assist and aid the Collateral Agent to obtain as soon as
practicable any necessary approvals or consents for the exercise of any such remedies, rights and
powers.

     SECTION 4.04. Inspection and Verification. The Collateral Agent and its representatives as
the Collateral Agent may reasonably designate shall have the right, at the Grantors’ own cost and
expense, to at all reasonable times and reasonable intervals and upon reasonable prior notice
inspect the Collateral, all records related thereto (and to make extracts and copies from such
records) and the premises upon which any of the Collateral is located in each case during business
hours. Notwithstanding the previous sentence, prior to the occurrence and continuance of an Event
of Default, the Collateral Agent may make no more than two such inspections during any fiscal year
and, in any event, the Grantor shall pay for no more than two inspections each fiscal year. The
Collateral Agent shall have the absolute right to share any
information

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it gains from such inspection or verification with any Secured Party (subject to Section 9.16 of
the Credit Agreement).

     SECTION 4.05. Taxes; Encumbrances. Each Grantor shall pay and discharge all of its material
Taxes and all lawful claims in accordance with Section 5.14 of the Credit Agreement. In its
reasonable discretion, the Collateral Agent may discharge past due taxes, assessments, charges,
fees, Liens, security interests or other encumbrances at any time levied or placed on the
Collateral except to the extent the same constitute Permitted Liens or to the extent such charges,
fees, Liens, security interests or other encumbrances are being contested in accordance with
Section 5.14 of the Credit Agreement, and may pay for the maintenance and preservation of the
Collateral to the extent any Grantor fails to do so as required by this Agreement (in each case
with reasonable prior written notice to such Grantor), and each Grantor jointly and severally
agrees to reimburse the Collateral Agent within 30 days of written demand for any payment made or
any expense incurred by the Collateral Agent pursuant to the foregoing authorization;
provided, however, that nothing in this Section 4.05 shall be interpreted as
excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or
any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect
to taxes, assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.

     SECTION 4.06. Assignment of Security Interest. If at any time any Grantor shall take a
security interest in any Property of an Account Debtor or any other Person to secure payment and
performance of an Account valued in excess of $500,000, such Grantor shall, on each date on which
financial statements are required to be delivered under Section 5.01(a) or (b) of the Credit
Agreement, notify the Collateral Agent and take such actions as may be requested by the Collateral
Agent to make the Collateral Agent’s interest in such Property a matter of public record.

     SECTION 4.07. Continuing Obligations of the Grantors. Each Grantor shall remain liable to
observe and perform all the conditions and obligations to be observed and performed by it under
each contract, agreement or instrument relating to the Collateral, all in accordance with the terms
and conditions thereof.

     SECTION 4.08. Use and Disposition of Collateral. No Grantor shall make or permit to be made
an assignment for security, pledge or hypothecation of the Collateral, execute, authorize or permit
to be filed in any public office any financing statement (or similar statement, instrument of
registration or public notice under the law of any jurisdiction) relating to any Collateral or
shall grant any other Lien in respect of the Collateral other than Permitted Liens.

     SECTION 4.09. Insurance. The Grantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance
with Section 5.04 of the Credit Agreement.

     SECTION 4.10. Certain Covenants and Provisions Regarding Patent, Trademark and Copyright
Collateral.

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     (a) Each Grantor agrees that it will not, nor will it permit any of its licensees to, do any
act, or omit to do any act, whereby any Patent owned by such Grantor which is material to the
conduct of such Grantor’s business may become invalidated, unenforceable, or dedicated to the
public (other than at the end of its statutory term), and agrees that it shall use commercially
reasonable efforts to continue to mark any products covered by a Patent with the relevant patent
number as necessary and sufficient to establish and preserve its rights under applicable patent
laws; provided, however, that nothing in this Section 4.10(a) shall prevent such
Grantor from discontinuing the prosecution or maintenance of such Patent if, in the reasonable
business judgment of such Grantor, such Patent is no longer necessary or desirable in the conduct
of its business.

     (b) Each Grantor (either itself or through its licensees or its sublicenses) will, for each
Trademark owned by such Grantor which is material to the conduct of such Grantor’s business, use
its commercially reasonable efforts to (i) maintain each such registered Trademark in full force
free from any claim of abandonment or invalidity for nonuse, (ii) maintain substantially the same
(or higher) quality of products and services offered under such Trademark as are currently
maintained, (iii) display such Trademark with notice of Federal or foreign registration to the
extent necessary and sufficient to establish and preserve its rights under applicable law and (iv)
not knowingly use or knowingly permit the use of such Trademark in violation of any third party
rights; provided, however, that nothing in this Section 4.10(b) shall prevent such
Grantor from discontinuing the use, prosecution, or maintenance of such Trademark, if such
discontinuance is, in the reasonable business judgment of such Grantor, no longer necessary or
desirable in the conduct of its business.

     (c) Each Grantor shall promptly notify the Collateral Agent upon such Grantor obtaining
knowledge of any Patent, Trademark or Copyright owned by such Grantor and material to the conduct
of its business which may become abandoned, lost, unenforceable, invalidated, or dedicated to the
public (other than at the end of such item’s statutory term), or of any materially adverse
determination or development including the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office or United States Copyright
Office (or any court or similar office of any country) regarding such Grantor’s ownership of any
Patent, Trademark or Copyright material to the conduct of its business, or its right to register
the same, or to keep and maintain the same; provided, further, that nothing in this
Section 4.10(c) shall require providing notice in connection with officer actions for
pending Patent, Trademark or Copyrights applications.

     (d) If any Grantor shall at any time after the date hereof (i) obtain any ownership or other
rights in and/or to any additional Intellectual Property (including any Trademark applications
filed by such Grantor on an “intent-to-use” basis for which evidence of the use of such Trademarks
in interstate commerce has been submitted to and duly accepted by the United States Patent and
Trademark Office pursuant to 15 U.S.C. Section 1060(a) (or a successor provision)) or (ii) become
entitled to the benefit of any additional Collateral consisting of Intellectual Property or any
renewal or extension thereof, including any reissue, division, continuation, or
continuation-in-part of any Collateral consisting of Intellectual Property, or any improvement on
any Collateral consisting of Intellectual Property, the provisions of this Agreement shall
automatically apply thereto and any such item described in the preceding clause (i) or (ii) (other
than any Excluded Property) shall automatically constitute Collateral as if such would have
constituted

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Collateral at the time of execution hereof and such Collateral consisting of Intellectual
Property (other than any Excluded Property) shall be subject to the Lien and security interest
created by this Agreement without further action by any party. Each Grantor shall within thirty
(30) days with respect to Copyrights and within ninety (90) days with respect to Patents and
Trademarks provide to the Collateral Agent written notice of any of the foregoing Collateral
consisting of Intellectual Property owned by such Grantor which is the subject of a registration or
application in the United States and confirm the attachment of the Lien and security interest
created by this Agreement to any rights described in clauses (i) and (ii) above by execution and
delivery, within ten (10) days of providing such notice or such longer period as may be determined
by the Collateral Agent in its sole discretion of the acquisition by such Grantor of such
Intellectual Property, of an instrument in form and substance reasonably acceptable to the
Collateral Agent and the filing of any instruments or statements as shall be reasonably necessary
or requested by the Collateral Agent to create, record, preserve, protect or perfect the Collateral
Agent’s lien and security interest in such Intellectual Property.

     (e) Each Grantor will take all necessary steps in any proceeding before the United States
Patent and Trademark Office or United States Copyright Office, or any office or agency in any
political subdivision of the United States or in any other country or any political subdivision
thereof, to maintain and pursue each material application relating to the Patents, Trademarks
and/or Copyrights (and to obtain the relevant grant or registration) and to maintain each issued
Patent and each registration of the Trademarks or Copyrights owned by such Grantor that is material
to the conduct of any Grantor’s business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with such Grantor’s commercially reasonable business judgment, to initiate opposition,
interference and cancellation proceedings against third parties; provided, however,
that nothing in this Section 4.10(f) shall prevent such Grantor from failing to maintain or pursue
any such Trademark or Patent if, in the reasonable business judgment of such Grantor, the likely
costs of such maintenance or pursuit are likely to outweigh the likely benefits of such maintenance
or pursuit and such failure could not reasonably be expected to have a Material Adverse Effect.

     (f) In the event that any Grantor has actual knowledge that any Collateral consisting of a
material Patent, Trademark or Copyright owned or exclusively licensed by such Grantor has been or
is about to be infringed, misappropriated or diluted by a third party, such Grantor promptly shall
notify the Collateral Agent and, if within such Grantor’s good faith business judgment, the likely
benefits outweigh the likely costs, shall promptly sue for infringement, misappropriation or
dilution and to recover any and all damages for such infringement, misappropriation or dilution,
and shall take such actions as are deemed by such Grantor in its reasonable business judgment to be
reasonably appropriate under the circumstances to protect such Collateral.

     (g) For the purpose of enabling the Collateral Agent, during the continuance of an Event of
Default, to exercise rights and remedies under Article V hereof at such time as the
Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other
purpose, each Grantor hereby grants to the Collateral Agent an irrevocable, non-exclusive license
and, to the extent permitted under Intellectual Property Licenses granting such Grantor rights in
Intellectual Property, sublicense (in each case, exercisable without payment of royalties or other

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compensation to such Grantor) to use, license or sublicense any of the Intellectual Property
included in the Collateral, wherever the same may be located (excluding, for the avoidance of
doubt, any rights under any Intellectual Property License that are prohibited by the terms of such
License from being so licensed or to the extent that the grant of such license would otherwise
breach the terms of any agreement to which such Grantor as a party). Such license shall include
access to all media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout hereof, to the extent permitted under
license agreements governing use of such computer programs. With respect to Trademarks owned by
such Grantor, the license granted hereunder shall be subject to sufficient rights of quality
control and inspection in favor of such Grantor to avoid the risk of invalidation of such
Trademarks.

     (h) Unless there shall occur and be continuing any Event of Default, each Grantor shall have
the right to commence and prosecute in its own name, as the party in interest, for its own benefit
and at the sole cost and expense of the Grantors, such applications for protection of the
Intellectual Property owned by such Grantor and suits, proceedings or other actions to prevent the
infringement, misappropriation, counterfeiting, unfair competition, dilution, diminution in value
or other damage as are necessary to protect the Intellectual Property owned and/or exclusively
licensed by such Grantors. Upon the occurrence and during the continuance of any Event of Default,
upon notice to the applicable Grantor, the Collateral Agent shall have the right but shall in no
way be obligated to file applications for protection of the Intellectual Property owned by any
Grantor and/or bring suit in the name of any Grantor, the Collateral Agent or the Secured Parties
to enforce such Intellectual Property and any license thereunder. In the event of such suit filed
in the name of any Grantor by the Collateral Agent or the Secured Parties upon the occurrence and
during the continuance of any Event of Default, each Grantor shall, at the reasonable request of
the Collateral Agent, do any and all lawful acts and execute any and all documents requested by the
Collateral Agent in aid of such enforcement and the Grantors shall promptly reimburse and indemnify
the Collateral Agent for all costs and expenses incurred by the Collateral Agent in the exercise of
its rights under this Section 4.10(i) in accordance with Section 9.05 of the Credit Agreement. In
the event that the Collateral Agent shall elect not to bring suit to enforce the Intellectual
Property owned and/or exclusively licensed by any Grantor, each Grantor agrees, at the reasonable
request of the Collateral Agent, to take all commercially reasonable actions necessary, whether by
suit, proceeding or other action, to prevent the infringement, counterfeiting, unfair competition,
dilution, diminution in value of or other damage to any of the Intellectual Property by any Person.

     SECTION 4.11. Certain Covenants and Provisions Regarding Receivables.

     (a) Each Grantor shall keep and maintain at its own reasonable cost and expense complete
records of each Receivable, in a manner consistent with its customary business practice, including
records of all payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto. Each Grantor shall, at such Grantor’s sole cost and expense,
upon the Collateral Agent’s demand made at any time after the occurrence and during the continuance
of any Event of Default, deliver copies of evidence of Receivables, including copies of all
documents evidencing Receivables and any Books and Records relating thereto to the Collateral Agent
or to its representatives (original copies of which evidence and Books and Records may be retained
by such Grantor). Upon the occurrence and during the continuance of any Event of Default, the
Collateral Agent may transfer a full and complete copy of

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any Grantor’s books, records, credit information, reports, memoranda and all other writings
relating to the Receivables to and for the use by any Person that has acquired or is contemplating
acquisition of an interest in the Receivables or the Collateral Agent’s security interest therein
without the consent of any Grantor; provided that any such Person shall agree to be bound
by Section 9.16 of the Credit Agreement; provided, further, that, the Collateral
Agent may transfer such a copy to a Person engaged principally in the business of manufacture or
sale of high performance chemical based products that is a competitor of the Borrower or any of its
Subsidiaries only upon the occurrence and during the continuance of any Event of Default under
Section 7.01(a) or 7.01(i) of the Credit Agreement.

     (b) No Grantor shall rescind or cancel any obligations evidenced by any Receivable or modify
any term thereof or make any adjustment, discount, credit, rebate or reduction with respect thereto
except in the ordinary course of business consistent with its customary business practice, or
extend or renew any such obligations except in the ordinary course of business consistent with its
customary business practice or compromise or settle any dispute, claim, suit or legal proceeding
relating thereto or sell any Receivable or interest therein without the prior written consent of
the Collateral Agent except for (i) sales of assets permitted by Section 6.05 of the Credit
Agreement and (ii) in the ordinary course of business consistent with its customary business
practice. Each Grantor shall timely fulfill all obligations on its part to be fulfilled under or
in connection with the Receivables except in the ordinary course of business consistent with its
customary business practice.

     (c) Each Grantor shall cause to be collected from the Account Debtor of each of the
Receivables, as and when due in the ordinary course of business (including Receivables that are
delinquent, such Receivables to be collected in accordance with generally accepted commercial
collection procedures), any and all amounts owing under or on account of such Receivable, and apply
promptly upon receipt thereof all such amounts as are so collected to the outstanding balance of
such Receivable, except that any Grantor may, with respect to a Receivable, allow in the ordinary
course of business (i) a refund or credit due as a result of returned or damaged or defective
merchandise and (ii) such extensions of time to pay amounts due in respect of Receivables and such
other modifications of payment terms or settlements in respect of Receivables as shall be
commercially reasonable in the circumstances, all in accordance with such Grantor’s ordinary course
of business consistent with its collection practices as in effect from time to time. The costs and
expenses (including reasonable attorneys’ fees) of collection, in any case, whether incurred by any
Grantor, the Collateral Agent or any Secured Party, shall be paid by the Grantors.

ARTICLE V

REMEDIES

     SECTION 5.01. Remedies upon Default. Upon the occurrence and during the continuance of any
Event of Default, the Collateral Agent may from time to time (alternatively, successively or
concurrently on any one or more occasions) exercise in respect of the Collateral, in addition to
the other rights and remedies provided for herein or otherwise available to it, the following
remedies:

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     (a) Personally, or by agents or attorneys, immediately take possession of the
Collateral or any part thereof, from any Grantor or any other Person who then has possession
of any part thereof with or without notice or process of law, and for that purpose may enter
upon any Grantor’s premises where any of the Collateral is located, remove such Collateral,
remain present at such premises to receive copies of all communications and remittances
relating to the Collateral and use in connection with such removal and possession any and
all services, supplies, aids and other facilities of any Grantor;

     (b) Demand, sue for, collect or receive any money or property at any time payable or
receivable in respect of the Collateral including, upon any Event of Default under Section
7.01(a) or 7.01(i) of the Credit Agreement, instructing the obligor or obligors on any
agreement, instrument or other obligation constituting part of the Collateral to make any
payment required by the terms of such agreement, instrument or other obligation directly to
the Collateral Agent, and in connection with any of the foregoing, compromise, settle,
extend the time for payment and make other modifications with respect thereto;
provided, however, that in the event that any such payments are made
directly to any Grantor, prior to receipt by any such obligor of such instruction, such
Grantor shall segregate all amounts received pursuant thereto in trust for the benefit of
the Collateral Agent and shall promptly (but in no event later than one Business Day after
receipt thereof) pay such amounts to the Collateral Agent;

     (c) Sell, assign, grant a license to use or otherwise liquidate, or direct any Grantor
to sell, assign, grant a license to use or otherwise liquidate and dispose of, any and all
investments made in whole or in part with the Collateral or any part thereof, and take
possession of the proceeds of any such sale, assignment, license, liquidation or
disposition;

     (d) Take possession of the Collateral or any part thereof, by directing any Grantor in
writing to assemble all or part of the Collateral as directed by the Collateral Agent at a
place reasonably designated by the Collateral Agent. Each Grantor’s obligation to deliver
the Collateral as contemplated in this Section 5.01(d) is of the essence hereof. Upon
application to a court of equity having jurisdiction, the Collateral Agent shall be entitled
to a decree requiring specific performance by any Grantor of such obligation;

     (e) Withdraw all moneys, instruments, securities and other property in any bank,
financial securities, deposit or other account of any Grantor constituting Collateral for
application to the Obligations as provided in Section 5.07 hereof;

     (f) Retain and apply the distributions to the Obligations as provided in Section 5.07
hereof;

     (g) Exercise any and all rights as beneficial and legal owner of the Collateral,
including perfecting assignment of and exercising any and all voting, consensual and other
rights and powers with respect to any Collateral;

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     (h) In the Collateral Agent’s own name, in the name of a nominee of the Collateral
Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile
 or otherwise) with the Account Debtors and other obligors in respect of Receivables of
such Grantor and parties to contracts with such Grantor, to verify with such Persons, to the
Collateral Agent’s satisfaction, the existence, amount, terms of, and any other matter
relating to, Accounts, Chattel Paper, Payment Intangibles, General Intangibles, Instruments
and other Receivables that are Collateral; and

     (i) Exercise all the rights and remedies of a secured party on default under the UCC,
and the Collateral Agent may also in its sole discretion, without notice except as specified
in Section 5.02 hereof, sell, assign or grant a license to use the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange, broker’s board or
at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the Collateral Agent may
deem commercially reasonable. The Collateral Agent or any other Secured Party or any of
their respective Affiliates may be the purchaser, licensee, assignee or recipient of the
Collateral or any part thereof at any such public sale, and, to the extent permitted by
applicable law, at any such private sale, and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of the
Collateral sold, assigned or licensed at such sale, to use and apply any of the Obligations
owed to such Person as a credit on account of the purchase price of the Collateral or any
part thereof payable by such Person at such sale. Each purchaser, assignee, licensee or
recipient at any such sale shall acquire the property sold, assigned or licensed absolutely
free from any claim or right on the part of any Grantor, and each Grantor hereby waives, to
the fullest extent permitted by law, all rights of redemption, stay and/or appraisal which
it now has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. The Collateral Agent shall not be obligated to make any sale
of the Collateral or any part thereof regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Each Grantor hereby waives, to the fullest
extent permitted by law, any claims against the Collateral Agent arising by reason of the
fact that the price at which the Collateral or any part thereof may have been sold, assigned
or licensed at such a private sale was less than the price which might have been obtained at
a public sale, even if the Collateral Agent accepts the first offer received and does not
offer such Collateral to more than one offeree.

     SECTION 5.02. Notice of Sale. Each Grantor acknowledges and agrees that, to the extent notice
of sale or other disposition of the Collateral or any part thereof shall be required by law, 10
days’ prior notice to such Grantor of the time and place of any public sale or of the time after
which any private sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to any Grantor if it has
signed, after the occurrence of an Event of Default, a statement renouncing or modifying any right
to notification of sale or other intended disposition.

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     SECTION 5.03. Waiver of Notice and Claims. Each Grantor hereby waives, to the fullest extent
permitted by applicable law, notice or judicial hearing in connection with the Collateral Agent’s
taking possession or the Collateral Agent’s disposition of the Collateral or any
 part thereof, including any and all prior notice and hearing for any prejudgment remedy or
remedies and any such right which such Grantor would otherwise have under law, and each Grantor
hereby further waives, to the fullest extent permitted by applicable law: (i) except to the extent
arising out of gross negligence, bad faith or willful misconduct on the part of the Collateral
Agent, all damages occasioned by such taking of possession, (ii) all other requirements as to the
time, place and terms of sale or other requirements with respect to the enforcement of the
Collateral Agent’s rights hereunder and (iii) all rights of redemption, appraisal, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law. To the fullest extent
permitted by applicable law, the Collateral Agent shall not be liable for any incorrect or improper
payment made pursuant to this Article V in the absence of gross negligence or willful
misconduct on the part of the Collateral Agent. Any sale of, or the grant of options to purchase,
or any other realization upon, any Collateral shall operate to divest all right, title, interest,
claim and demand, either at law or in equity, of the applicable Grantor therein and thereto, and
shall be a perpetual bar both at law and in equity against such Grantor and against any and all
Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any
part thereof, from, through or under such Grantor.

     SECTION 5.04. Certain Sales of Collateral.

     (a) Each Grantor recognizes that, by reason of certain prohibitions contained in law, rules,
regulations or orders of any Governmental Authority, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Collateral, to limit purchasers to those who meet the
requirements of such Governmental Authority. Each Grantor acknowledges that any such sales may be
at prices and on terms less favorable to the Collateral Agent than those obtainable through a
public sale without such restrictions, and, notwithstanding such circumstances, agrees that any
such restricted sale shall be deemed to have been made in a commercially reasonable manner and
that, except as may be required by applicable law, the Collateral Agent shall have no obligation to
engage in public sales.

     (b) Each Grantor recognizes that, by reason of certain prohibitions contained in the
Securities Act of 1933, and applicable state securities laws, the Collateral Agent may be
compelled, with respect to any sale of all or any part of the Investment Property, to limit
purchasers to Persons who will agree, among other things, to acquire such Investment Property for
their own account, for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges that any such private sales may be at prices and on terms less favorable to
the Collateral Agent than those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement under the Securities Act of
1933), and, notwithstanding such circumstances, agrees that any such private sale shall be deemed
to have been made in a commercially reasonable manner and that the Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any Investment Property
for the period of time necessary to permit the issuer thereof to register it for a form of public
sale requiring registration under the Securities Act of 1933 or under applicable state securities
laws, even if such issuer would agree to do so.

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     (c) If the Collateral Agent determines to exercise its right to sell any or all of the
Securities Collateral or Investment Property, upon written request, the applicable Grantor shall
from time to time furnish to the Collateral Agent all such information as the Collateral Agent
  may request in order to determine the number of securities included in the Securities
Collateral or Investment Property which may be sold by the Collateral Agent as exempt transactions
under the Securities Act and the rules of the Securities and Exchange Commission thereunder, as the
same are from time to time in effect.

     (d) Each Grantor further agrees that a breach of any of the covenants contained in this
Section 5.04 will cause irreparable injury to the Collateral Agent and the other Secured Parties,
that the Collateral Agent and the other Secured Parties have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in this Section 5.04
shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees
not to assert any defenses against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred and is continuing.

     SECTION 5.05. No Waiver; Cumulative Remedies.

     (a) No failure on the part of the Collateral Agent to exercise, no course of dealing with
respect to, and no delay on the part of the Collateral Agent in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power, privilege or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right, power, privilege or remedy; nor shall the Collateral Agent be
required to look first to, enforce or exhaust any other security, collateral or guaranties. All
rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies
provided by law or otherwise available.

     (b) In the event that the Collateral Agent shall have instituted any proceeding to enforce any
right, power, privilege or remedy under this Agreement or any other Loan Document by foreclosure,
sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Collateral Agent, then and in every such
case, the Grantors, the Collateral Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Collateral, and all rights,
remedies, privileges and powers of the Collateral Agent and the other Secured Parties shall
continue as if no such proceeding had been instituted.

     SECTION 5.06. Certain Additional Actions Regarding Intellectual Property. If any Event of
Default shall have occurred and be continuing, upon the written demand of the Collateral Agent,
each Grantor shall execute and deliver to the Collateral Agent an assignment or assignments (in a
form satisfactory to the Collateral Agent) of such Grantor’s rights in the Intellectual Property,
and, with respect to those items of the Intellectual Property Collateral consisting of issued
Patents, registered Trademarks and/or registered Copyrights (or applications therefor) owned by
such Grantor, such assignment shall be in recordable form satisfactory to the Collateral Agent, and
such other documents as are necessary or appropriate to carry out the intent and purposes hereof.

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     SECTION 5.07. Application of Proceeds. All Proceeds received by the Collateral Agent in
respect of any sale of, collection from or other realization upon all or any part of the Collateral
pursuant to the exercise by the Collateral Agent of its remedies shall, to the extent available for
distribution (it being understood that the Collateral Agent may liquidate investments
 prior to maturity in order to make a distribution pursuant to this Section 5.07), be
distributed (subject to the provisions of Section 5.08) by the Collateral Agent on each
Distribution Date in the order specified in Section 7.04 of the Credit Agreement.

     SECTION 5.08. Collateral Agent’s Calculations. In making the determinations and allocations
required by Section 5.07, the Collateral Agent may conclusively rely upon information supplied by
the Administrative Agent or any Secured Hedging Counterparty as to the amounts of unpaid principal
and interest and other amounts outstanding with respect to any Obligations, and the Collateral
Agent shall have no liability to any of the Secured Parties for actions taken in reliance on such
information; provided that nothing in this sentence shall prevent any Grantor from
contesting any amounts claimed by any Secured Party in any information so supplied. In addition,
for purposes of making the allocations required by Section 5.07 with respect to any amount that is
denominated in any currency other than Dollars, the Collateral Agent shall, on the applicable
Distribution Date, convert such amount into an amount of Dollars based upon the relevant Spot
Selling Rate. All distributions made by the Collateral Agent pursuant to Section 5.07 shall be
(subject to any decree of any court of competent jurisdiction) final (absent manifest error), and
the Collateral Agent shall have no duty to inquire as to the application by the Administrative
Agent of any amounts distributed to it for distribution to any Lenders.

ARTICLE VI

The Collateral Agent

     SECTION 6.01. General Authority of the Collateral Agent over the Collateral.

     (a) Until the termination of this Agreement pursuant to Section 7.11, subject to the
provisions herein, each Grantor hereby appoints the Collateral Agent as its true and lawful
attorney-in-fact for the purpose, during the continuance of an Event of Default, of taking any
action and executing any and all documents and instruments that the Collateral Agent may deem
necessary to carry out the terms of this Agreement and accomplish the purposes hereof and, without
limiting the generality of the foregoing, each Grantor hereby acknowledges that the Collateral
Agent shall have all powers and remedies set forth in the Security Documents. The foregoing grant
of authority is a power of attorney coupled with an interest and such appointment shall be
irrevocable for the term hereof.

     (b) By acceptance of the benefits of this Agreement and the Security Documents: each Secured
Party shall be deemed irrevocably (1) to consent to the appointment of the Collateral Agent as its
agent hereunder and under the other Security Documents, (2) to confirm that the Collateral Agent
shall have the authority to act as the exclusive agent of such Secured Party for enforcement of any
provisions of this Agreement and the other Security 

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Documents against any Grantor or the exercise
of remedies hereunder or thereunder, (3) to agree that such Secured Party shall not take any action
to enforce any provisions of this Agreement or any other Security Document against any Grantor or
to exercise any remedy hereunder or thereunder and (4) to agree to be bound by the terms of this
Agreement and the other Security Documents.

     (c) The Collateral Agent hereby agrees that it holds and will hold all of its right, title and
interest in, to and under the Security Documents and the Collateral granted to the Collateral

Agent thereunder whether now existing or hereafter arising (all such right, title and interest
being hereinafter referred to as the “Collateral Estate”) under and subject to the
conditions set forth in this Agreement; and the Collateral Agent further agrees that it will hold
such Collateral Estate for the benefit of the Secured Parties, for the enforcement of the payment
of all Obligations (subject to the limitations and priorities set forth herein and in the
respective Security Documents) and as security for the performance of and compliance with the
covenants and conditions of this Agreement and each of the Security Documents.

     SECTION 6.02. Exercise of Powers. All of the powers, remedies and rights of the Collateral
Agent as set forth in this Agreement may be exercised by the Collateral Agent in respect of any
Security Document as though set forth in full therein and all of the powers, remedies and rights of
the Collateral Agent as set forth in any Security Document may be exercised from time to time as
herein and therein provided.

     SECTION 6.03. Remedies Not Exclusive.

     (a) No remedy conferred upon or reserved to the Collateral Agent herein or in the other
Security Documents is intended to be exclusive of any other remedy or remedies, but every such
remedy shall be cumulative and shall be in addition to every other remedy conferred herein or in
any other Security Document or now or hereafter existing at law or in equity or by statute.

     (b) No delay or omission by the Collateral Agent to exercise any right, remedy or power
hereunder or under any Security Document shall impair any such right, remedy or power or shall be
construed to be a waiver thereof, and every right, power and remedy given by this Agreement or any
Security Document to the Collateral Agent may be exercised from time to time and as often as may be
deemed expedient by the Collateral Agent.

     (c) If the Collateral Agent shall have proceeded to enforce any right, remedy or power under
this Agreement or any Security Document and the proceeding for the enforcement thereof shall have
been discontinued or abandoned for any reason or shall have been determined adversely to the
Collateral Agent, then the Grantors, the Collateral Agent and the other Secured Parties shall,
subject to any determination in such proceeding, severally and respectively be restored to their
former positions and rights hereunder or thereunder with respect to the Collateral Estate and in
all other respects, and thereafter all rights, remedies and powers of the Collateral Agent shall
continue as though no such proceeding had been taken.

     SECTION 6.04. Waiver and Estoppel.

     (a) Each Grantor, to the extent it may lawfully do so, on behalf of itself and all who may
claim through or under it, including without limitation any and all subsequent creditors, vendees,
assignees and licensors, waives and releases all rights to demand or to have any marshaling of the
Collateral upon any sale, whether made under any power of sale granted herein or in any Security
Document or pursuant to judicial proceedings or upon any foreclosure
or any 

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enforcement of this
Agreement or any Security Document and consents and agrees that all the Collateral may at any such
sale be offered and sold as an entirety.

     (b) Each Grantor waives, to the extent permitted by applicable law, presentment, demand,
protest and any notice of any kind (except notices explicitly required hereunder or under
any Security Document) in connection with this Agreement and the Security Documents and any
action taken by the Collateral Agent with respect to the Collateral.

     SECTION 6.05. Limitation on Collateral Agent’s Duty in Respect of Collateral. Except as
required by applicable law, beyond its express duties specified in the Security Documents, the
Collateral Agent shall not have any duty to the Grantors or to the Secured Parties as to any
Collateral in its possession or control or in the possession or control of any of its agents or
nominees, or any income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.

     SECTION 6.06. Limitation by Law. All rights, remedies and powers provided in this Agreement
or any Security Document may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law, and all the provisions hereof are intended to be subject
to all applicable mandatory provisions of law which may be controlling and to be limited to the
extent necessary so that they will not render this Agreement invalid, unenforceable in whole or in
part or not entitled to be recorded, registered or filed under the provisions of any applicable
law.

     SECTION 6.07. Rights of Secured Parties in Respect of Obligations. Notwithstanding any other
provision of this Agreement or any Security Document, the right of each Secured Party to receive
payment of the Obligations held by such Secured Party when due (whether at the stated maturity
thereof, by acceleration or otherwise), as expressed in the instruments evidencing or agreements
governing such Obligations, or to institute suit for the enforcement of such payment on or after
such due date, shall not be impaired or affected without the consent of such Secured Party given in
the manner prescribed by the instruments evidencing or agreements governing such Obligations.

     SECTION 6.08. Compensation and Expenses. Without limitation of its obligations under the
other Loan Documents, each Grantor agrees to pay to the Collateral Agent, from time to time upon
written demand, all of the reasonable out-of-pocket costs and expenses of the Collateral Agent
(including, without limitation, the reasonable fees and disbursements of its counsel) (i) arising
in connection with the administration of the Collateral, the preparation, execution, delivery,
modification and termination of this Agreement and each Security Document or the enforcement of any
of the provisions hereof or thereof or (ii) incurred or required to be advanced in connection with
the sale or other disposition of Collateral pursuant to any Security Document and the preservation,
protection or defense of the Collateral Agent’s rights under this Agreement and the Security
Documents and in and to the Collateral and the Collateral Estate, in each case, to the extent the
Borrower would be required to do so pursuant to Section 9.05 of the Credit Agreement. Such fees,
costs and expenses are intended to constitute expenses of administration under any bankruptcy law
relating to creditors’ rights generally.

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     SECTION 6.09. Stamp and Other Similar Taxes. Each Grantor agrees to indemnify and hold
harmless the Collateral Agent, the Administrative Agent and each other Secured Party from any
present or future claim for liability for any stamp or any other similar tax, and any penalties or
interest with respect thereto, which may be assessed, levied or collected by any jurisdiction in
connection with this Agreement, any Security Document, the Collateral Estate or any Collateral.
The obligations of each Grantor under this Section 6.09 shall survive the termination
 of the other provisions of this Agreement and the resignation or removal of the Collateral Agent
hereunder.

     SECTION 6.10. Filing Fees, Excise Taxes, etc. Each Grantor agrees to pay or to reimburse the
Collateral Agent for any and all payments made by the Collateral Agent in respect of all search,
filing, recording and registration fees, taxes, excise taxes and other similar imposts which are
payable in respect of the execution and delivery of this Agreement and each Security Document. The
obligations of each Grantor under this Section 6.10 shall survive the termination of the other
provisions of this Agreement and the resignation or removal of the Collateral Agent hereunder.

     SECTION 6.11. Indemnification. Without limitation of its indemnification obligations under
the other Loan Documents, each Grantor agrees to pay, and to save the Collateral Agent and the
other Secured Parties harmless from, any and all losses, claims, damages, liabilities and
out-of-pocket expenses (including reasonable counsel fees, charges and disbursements) arising out
of, in any way connected with, or as a result of the execution, delivery, enforcement, performance
and administration of this Agreement to the extent the Borrower would be required to do so pursuant
to Section 9.05 of the Credit Agreement.

ARTICLE VII

MISCELLANEOUS

     SECTION 7.01. Notices. All communications and notices hereunder shall (except as otherwise
expressly permitted herein) be in writing and given as provided in Section 9.01 of the Credit
Agreement. All communications and notices hereunder to any Subsidiary Guarantor shall be given to
it c/o the Borrower at the Borrower’s address as provided in Section 9.01 of the Credit Agreement,
with a copy to the Borrower.

     SECTION 7.02. Survival of Agreement. All covenants, agreements, representations and
warranties made by any Grantor herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Collateral Agent and the other Secured Parties and shall
survive the making by the Lenders of the Loans, regardless of any investigation made by the Secured
Parties or on their behalf, and shall continue in full force and effect until this Agreement shall
terminate.

     SECTION 7.03. Binding Effect. This Agreement shall be binding upon each Grantor and the
Collateral Agent and their respective successors and permitted assigns, and shall inure to the
benefit of each Grantor, the Collateral Agent and the other Secured Parties and their respective
permitted successors and assigns, except that no Grantor shall have the right to assign or transfer
its rights or obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly permitted by this Agreement or the Credit
Agreement.

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     SECTION 7.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

     SECTION 7.05. Waivers; Amendment; Several Agreement.

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

     (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into in accordance with Section 9.08 of
the Credit Agreement.

     (c) This Agreement shall be construed as a separate agreement with respect to each Grantor and
may be amended, modified, supplemented, waived or released with respect to any Grantor without the
approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.

     SECTION 7.06. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS.

     SECTION 7.07. Severability. In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions. It is understood
and agreed among the parties that this Agreement shall create separate security interests in the
Collateral securing the Obligations as provided in Section 2.01, and that any determination by any
court with jurisdiction that the security interest securing any Obligation or class of Obligations

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is invalid for any reason shall not in and of itself invalidate the Security Interests
securing any other Obligations hereunder.

     SECTION 7.08. Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall constitute an original, but all of which, when taken together, shall constitute a
single contract and shall become effective as provided in Section 7.03. Delivery of an executed
signature page to this Agreement by facsimile or other electronic transmission (e.g., “PDF” or
“tif” via e-mail) shall be effective as delivery of a manually executed counterpart hereof.

     SECTION 7.09. Headings. Article and Section headings used herein are for the purpose of
reference only, are not part of this Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.

     SECTION 7.10. Jurisdiction; Consent to Service of Process.

     (a) Each party to this Agreement hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America for the Southern District of New York, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each Grantor hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding
may be heard and determined in such New York State court or, to the extent permitted by law, in
such Federal court. Each party to this Agreement agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right
that the Collateral Agent or any other Secured Party may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any Grantor or its
properties in the courts of any jurisdiction.

     (b) Each party to this Agreement hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
or the other Loan Documents in any New York State or Federal court referred to in paragraph (a) of
this Section. Each Grantor hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

     (c) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.15 of the Credit Agreement. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.

     SECTION 7.11. Termination.

     (a) This Agreement and the Security Interests (i) shall automatically terminate when all the
Loan Obligations (other than unasserted contingent indemnification obligations or other contingent
obligations, in each case, not due and payable) have been paid in full and no Letters

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of Credit are outstanding pursuant to the Credit Agreement unless arrangements reasonably
satisfactory to the Issuer have been made to eliminate the Issuer’s credit risk with respect to
such L/C Obligation and all Commitments have terminated (at which time the Collateral Agent shall
execute and deliver to the Grantors, at the Grantors’ expense, all UCC termination statements and
other documents which the Grantors shall reasonably request to evidence such termination) and (ii)
shall continue to be effective or shall be reinstated, as the case may be, if at any time any
payment in respect of any Obligation is rescinded or must otherwise be restored by any Secured
Party upon any bankruptcy or reorganization of any Grantor or otherwise. Any execution and
delivery of termination statements or documents pursuant to this Section 7.11(a) shall be without
recourse to or warranty by the Collateral Agent. A Subsidiary Guarantor shall automatically be
released from its obligations hereunder and the Security Interests in the Collateral of such
Subsidiary Guarantor shall be automatically released in the event that (x) the Equity Interests of
such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of pursuant to a
transaction permitted under the Credit Agreement to a Person that is not an Affiliate of Borrower
such that such Person is no longer a Restricted Subsidiary of Borrower or (y) such Subsidiary
Grantor ceases to be a Restricted Subsidiary as a result of a transaction permitted under the
Credit Agreement and, in each case, the Collateral Agent shall execute and deliver to any Grantor,
at such Grantor’s expense, all UCC termination statements and other documents that such Grantor
shall reasonably request to evidence such release.

     (b) Upon any sale or other transfer by any Grantor of any Collateral to a Person that is not a
Loan Party that is permitted under the Credit Agreement or, upon the effectiveness of any written
consent to the release of the security interests granted hereby in any Collateral pursuant to
Section 9.08 of the Credit Agreement, security interests in such Collateral shall be automatically
released. In connection with such release, the Collateral Agent shall execute and deliver to any
Grantor, at such Grantor’s expense, all UCC termination statements and other documents that such
Grantor shall reasonably request to evidence such release. Any execution and delivery of UCC
termination statements and similar documents pursuant to this Section 7.11(b) shall be without
recourse to or warranty by the Collateral Agent.

     SECTION 7.12. Additional Grantors. To the extent any Subsidiary shall be required to become a
Grantor pursuant to any Loan Document, upon execution and delivery by the Collateral Agent and such
Subsidiary of an instrument in the form of Annex I hereto, such Subsidiary shall become a
Grantor hereunder with the same force and effect as if originally named as a Grantor herein. Each
such Subsidiary shall at such time deliver to the Collateral Agent a completed Perfection
Certificate. The execution and delivery of any such instrument shall not require the consent of
any other Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in
full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.

     SECTION 7.13. Financing Statements. Each Grantor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any relevant jurisdiction (a) a short form
security agreement with the United States Patent and Trademark Office or United States Copyright
Office (or any successor office or any similar office in any other country), (b) any initial
financing statements (including fixture filings) and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction
for the filing of any financing statement or amendment relating to the Collateral, including

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(i) whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor, (ii) any financing or continuation
statements or other documents without the signature of such Grantor where permitted by law, and
such financing statements may contain an indication or description of Collateral that describes
such property (x) in the same manner as described in this Agreement or (z) in any other manner as
the Collateral Agent may determine, in its sole discretion, is necessary or prudent to ensure the
perfection of the security interest in the Collateral granted to the Collateral Agent in connection
herewith, including, without limitation, describing such property as “all assets of the debtor now
owned or hereafter acquired” (or using words of similar import) and (iii) in the case of a
financing statement filed as a fixture filing or covering Collateral constituting minerals or the
like to be extracted or timber to be cut, a sufficient description of the real property to which
such Collateral relates, and (c) any other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interests in the Collateral granted by each
Grantor without the signature of any Grantor. Each Grantor agrees to provide all information
described in the immediately preceding sentence to the Collateral Agent promptly upon written
request. Each Grantor hereby ratifies its authorization for the Collateral Agent to file in any
relevant jurisdiction any financing statements relating to the Collateral if filed prior to the
date hereof.

     SECTION 7.14. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby appoints the
Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument that the Collateral
Agent may deem necessary to accomplish the purposes hereof, which appointment is irrevocable and
coupled with an interest. Without limiting the generality of the foregoing, the Collateral Agent
shall have the right, upon the occurrence and during the continuance of an Event of Default, with
full power of substitution either in the Collateral Agent’s name or in the name of such Grantor,
(a) to receive, endorse, assign or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or any part thereof; (b) to demand,
collect, receive payment of, give receipt for and give discharges and releases of all or any of the
Collateral; (c) to ask for, demand, sue for, collect, receive and give acquittance for any and all
moneys due or to become due under and by virtue of any Collateral; (d) to sign the name of any
Grantor on any invoice or bill of lading relating to any of the Collateral; (e) to send
verifications of Accounts to any Account Debtor; (f) to commence and prosecute any and all suits,
actions or proceedings at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in respect of any
Collateral; (g) to settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (h) with at least 5 Business Days’ prior notice to the
Grantor to notify, or to require any Grantor to notify Account Debtors to make payment directly to
the Collateral Agent; and (i) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things
necessary to carry out the purposes of this Agreement, as fully and completely as though the
Collateral Agent were the absolute owner of the Collateral for all purposes; provided that
nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make
any commitment or to make any inquiry as to the nature or sufficiency of any payment received by
the Collateral Agent, or to present or file any claim or notice, or to take any action with respect
to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable
only for amounts actually received as a result of the exercise of the powers

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granted to them herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder, except for their own
gross negligence, willful misconduct or bad faith.

     SECTION 7.15. Intercreditor Agreement. Notwithstanding anything to the contrary contained
herein, the liens and security interest granted to the Collateral Agent and the exercise of any
right or remedy by the Collateral Agent hereunder, in each case, may become subject to the
provisions of the First Lien Intercreditor Agreement. In the event of any conflict between the
terms of the First Lien Intercreditor Agreement and the terms of this Agreement, the terms of the
First Lien Intercreditor Agreement shall govern and control.

     SECTION 7.16. Mortgages. In the case of a conflict between this Agreement and the Mortgages
with respect to Collateral that is real property (including Fixtures), the Mortgages shall govern.
In all other conflicts between this Agreement and the Mortgages, this Agreement shall govern.

     SECTION 7.17. Conflicts. In the case of any conflict between this Agreement and the Credit
Agreement, the provisions of the Credit Agreement shall govern.

[Signature Pages Follow]

-31-

 

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

	 	 	 	 	 
	 	SOLUTIA INC.

 	 
	 
	 	By:  	/s/ James M. Sullivan
 	 
	 	 	Name:  	James M. Sullivan 	 
	 	 	Title:  	Executive Vice President, Chief

Financial Officer and Treasurer 	 
	 
	 	CPFILMS INC.

 	 
	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A. Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	FLEXSYS AMERICA CO.

 	 
	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A. Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	FLEXSYS AMERICA L.P.

     by FLEXSYS AMERICA CO.,

     its general partner

 	 
	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A. Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 

S-1

 

	 	 	 	 	 
	 	MONCHEM INTERNATIONAL, INC.

 	 
	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A. Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	SOLUTIA BUSINESS ENTERPRISES INC.

 	 
	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A. Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	SOLUTIA INTER-AMERICA, INC.

 	 
	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A. Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	SOLUTIA OVERSEAS, INC.

 	 
	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A. Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 

S-2

 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Collateral Agent

 	 
	 
	 	By:  	/s/ Erin Morrissey
 	 
	 	 	Name:  	Erin Morrissey 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 
	 	By:  	                       /s/ Carin Keegan
 	 
	 	 	Name:  	Carin Keegan 	 
	 	 	Title:  	Director 	 
	 

S-3exv10w4

Exhibit 10.4

 

 

PLEDGE AGREEMENT

by

SOLUTIA INC.

and

THE SUBSIDIARIES PARTY HERETO,

as Pledgors,

and

DEUTSCHE BANK TRUST COMPANY AMERICAS

as Collateral Agent

 

Dated as of March 17, 2010

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 1.

	 	Pledge
	 	 	1	 
	SECTION 2.

	 	Delivery of the Securities Collateral
	 	 	2	 
	SECTION 3.

	 	Representations, Warranties and Covenants
	 	 	3	 
	SECTION 4.

	 	Registration in Nominee Name; Denominations
	 	 	4	 
	SECTION 5.

	 	Voting Rights; Dividends and Interest, etc
	 	 	4	 
	SECTION 6.

	 	Remedies upon Event of Default
	 	 	5	 
	SECTION 7.

	 	Application of Proceeds of Sale
	 	 	7	 
	SECTION 8.

	 	Collateral Agent Appointed Attorney-in-Fact
	 	 	7	 
	SECTION 9.

	 	Waivers; Amendment
	 	 	7	 
	SECTION 10.

	 	Securities Act, etc
	 	 	8	 
	SECTION 11.

	 	Registration, etc
	 	 	8	 
	SECTION 12.

	 	Termination or Release
	 	 	9	 
	SECTION 13.

	 	Notices
	 	 	9	 
	SECTION 14.

	 	Further Assurances
	 	 	10	 
	SECTION 15.

	 	Binding Effect; Several Agreement
	 	 	10	 
	SECTION 16.

	 	Survival of Agreement; Severability
	 	 	10	 
	SECTION 17.

	 	GOVERNING LAW
	 	 	10	 
	SECTION 18.

	 	Counterparts
	 	 	10	 
	SECTION 19.

	 	Rules of Interpretation
	 	 	11	 
	SECTION 20.

	 	Jurisdiction; Consent to Service of Process
	 	 	11	 
	SECTION 21.

	 	WAIVER OF JURY TRIAL
	 	 	11	 
	SECTION 22.

	 	Additional Pledgors
	 	 	11	 
	SECTION 23.

	 	Financing Statements
	 	 	11	 
	SECTION 24.

	 	INTERCREDITOR AGREEMENT GOVERNS
	 	 	12	 
	SECTION 25.

	 	Conflicts
	 	 	12	 

SCHEDULES

	 	 	 
	Schedule I

	 	Subsidiary Guarantors
	Schedule II

	 	Pledged Stock and Debt Securities

-i- 

 

PLEDGE AGREEMENT

          PLEDGE AGREEMENT (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, this “Agreement”) dated as of March 17, 2010 among SOLUTIA
INC., a Delaware corporation (the “Borrower”), each Subsidiary of the Borrower listed on
Schedule I hereto (collectively, together with each Subsidiary that becomes a party hereto
pursuant to Section 22 of this Agreement, the “Subsidiary Guarantors” and, together with
the Borrower, the “Pledgors”), and DEUTSCHE BANK TRUST COMPANY AMERICAS (in such capacity,
together with its successors in such capacity, the “Collateral Agent”) as collateral agent
for the Secured Parties (as defined in the Credit Agreement referred to below).

R E C I T A L S

          A. The Borrower, the Collateral Agent, Deutsche Bank Trust Company Americas, as administrative
agent (in such capacity and together with any successors in such capacity, the “Administrative
Agent”) for the Lenders (as defined herein), the lending institutions from time to time party
thereto (the “Lenders”) and the other agents party thereto have entered into that certain
Credit Agreement, dated as of the date hereof (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”), providing
for the making of Loans to the Borrower and the issuance of Letters of Credit pursuant to, and upon
the terms and subject to the conditions specified in, the Credit Agreement.

          B. Each Subsidiary Guarantor has, pursuant to the Guarantee Agreement, dated as of the date
hereof, among other things, agreed to unconditionally guarantee the obligations of the Borrower
under the Credit Agreement.

          C. The Borrower and each Subsidiary Guarantor will receive substantial benefits from the
execution, delivery and performance of the obligations of the Borrower under the Credit Agreement
and are, therefore, willing to enter into this Agreement.

          D. Contemporaneously with the execution and delivery of this Agreement, the Borrower and the
Subsidiary Guarantors have executed and delivered to the Collateral Agent a Security Agreement (as
amended, restated, amended and restated, supplemented or otherwise modified from time to time, the
“Security Agreement”).

          E. This Agreement is given by each Pledgor in favor of the Collateral Agent for the benefit of
the Secured Parties to secure the payment and performance of the Obligations.

          Capitalized terms used herein and not defined herein shall have meanings assigned to such
terms in the Credit Agreement.

          NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor,
the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby and the
Collateral Agent hereby agree as follows:

          SECTION 1. Pledge.

          (a) The following liens are hereby granted:

          (i) As collateral security for the payment and performance, in full of all the Obligations,
each Pledgor hereby pledges and grants to the Collateral Agent, for the ratable benefit of Secured

 

 

Parties, a lien on and security interest in and to all of the right, title and interest of
such Pledgor in, to and under (a) all the shares of capital stock and other Equity Interests owned
by it, including those listed on Schedule II hereto and any shares of capital stock and other
Equity Interests obtained in the future by such Pledgor and the certificates, if any, representing
all such shares or interests (collectively, the “Pledged Stock”); (b)(i) all debt
securities owned by it listed opposite the name of the Pledgor on Schedule II hereto, (ii) all debt
securities in the future issued to the Pledgor and (iii) all promissory notes and any other
instruments evidencing such debt securities (collectively, the “Pledged Debt Securities”
and together with the Pledged Stock, the “Pledged Securities”); (c) all payments of
principal or interest, dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, in exchange for or upon the conversion of the
securities referred to in clauses (a) and (b) above; (d) all rights and privileges of the Pledgor
with respect to the securities and other property referred to in clauses (a), (b) and (c) above;
and (e) all proceeds of any and all of the foregoing (all the foregoing, collectively, the
“Securities Collateral”); provided, however, that, the term “Securities
Collateral” shall not include (i) to the extent such pledge would, in the good faith judgment of
the Pledgor reasonably be expected to result in material adverse tax consequences to the Borrower
or its Restricted Subsidiaries, more than 65% of the issued and outstanding shares of the Equity
Interests entitled to vote of any first tier Non-US Restricted Subsidiary; (ii) the Equity
Interests of any Excluded Subsidiary; (iii) the Equity Interests of any Excluded Joint Venture and
(iv) any Equity Interests or debt securities owned by such Pledgor if and to the extent that the
grant of the security interest shall, after giving effect to Sections 9-406, 9-407, 9-408 or 9-409
of the UCC (or any successor provision or provisions) or any other applicable law, (A) except in
the case of a Wholly Owned Subsidiary, constitute or result in the abandonment, invalidation or
unenforceability of any right, title or interest of such Pledgor therein, (B) except in the case of
a Wholly Owned Subsidiary, constitute or result in a breach or termination pursuant to the terms
of, or a default under, any such Equity Interest or debt securities, (C) be void or illegal under
any applicable governmental law, rule or regulation, or (D) except in the case of a Wholly Owned
Subsidiary, be prohibited by (i) the organizational documents of the issuer of such Equity
Interests or debt securities or (ii) agreements among the equity holders of the issuer of such
Equity Interests or debt securities.

          (b) Upon delivery to the Collateral Agent, (a) any certificated Pledged Securities now or
hereafter included in the Securities Collateral shall be accompanied by stock powers duly executed
in blank or other similar instruments of transfer reasonably satisfactory to the Collateral Agent
and (b) all other property comprising part of the Securities Collateral shall be accompanied by
proper instruments of assignment duly executed by the applicable Pledgor. Each subsequent delivery
of Pledged Securities shall be accompanied by a schedule describing the securities then being
pledged hereunder, which schedule shall be attached hereto as a supplement to Schedule II and made
a part hereof. Each schedule so delivered shall supplement any prior schedules so delivered.

          TO HAVE AND TO HOLD the Securities Collateral, together with all right, title, interest,
powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent for
the benefit of the Secured Parties; subject, however, to the terms, covenants and
conditions hereinafter set forth.

          SECTION 2. Delivery of the Securities Collateral.

          (a) Each Pledgor agrees to promptly deliver or cause to be delivered to the Collateral Agent
any and all certificates or other instruments or documents representing the Securities Collateral;
provided that only Pledged Debt Securities (other than intercompany Indebtedness owed to
any Pledgor by any Subsidiary) with a face amount in excess of $500,000 are required to be
delivered pursuant to this clause (a).

-2-

 

          (b) Each Pledgor will cause any Indebtedness for borrowed money owed to such Pledgor by any
Person to be evidenced by a duly executed promissory note that is pledged to the Collateral Agent
for the benefit of the Secured Parties and delivered to the Collateral Agent pursuant to the terms
hereof (provided that this clause (b) shall not apply to any such Indebtedness in an
aggregate principal amount less than $500,000 owing by any Person that is not a Subsidiary);
provided, that, except with respect to promissory notes representing Indebtedness
of more than $1,000,000, such promissory notes shall be required to be delivered to the Collateral
Agent only on each date on which financial statements are required to be delivered under Section
5.01 (a) or (b) of the Credit Agreement; provided further, that, to the extent that
any such promissory note constitutes an Intercompany Note and to the extent that any Pledgor is
required hereunder to deliver any such Intercompany Note to the Collateral Agent for purposes of
possession, such Pledgor’s obligations hereunder with respect to such delivery shall be deemed
satisfied by the delivery to the Collateral Agent of the Master Intercompany Note.

          (c) If any Equity Interests now or hereafter acquired by any Pledgor constituting Pledged
Stock are uncertificated, such Pledgor shall comply with its obligations under Section 3.05(b) of
the Security Agreement.

          SECTION 3. Representations, Warranties and Covenants. Each Pledgor hereby represents,
warrants and covenants, as to itself and the Securities Collateral pledged by it hereunder, to and
with the Collateral Agent that:

     (a) as of the date hereof the Pledged Stock represents that percentage as set forth on
Schedule II of the issued and outstanding shares of each class of the capital stock or other
Equity Interests of the issuer with respect thereto;

     (b) such Pledgor (i) is, as of the date hereof, the direct owner, beneficially and of
record, of the Pledged Securities indicated on Schedule II, (ii) holds the Pledged
Securities free and clear of all Liens, other than the Liens created hereunder and Liens
permitted by Section 6.02 of the Credit Agreement, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security interest in or other
Lien on, the Securities Collateral, except as permitted by the Credit Agreement, and (iv)
subject to Section 2 and Section 5, will cause any and all Securities Collateral, whether
for value paid by such Pledgor or otherwise, to be promptly deposited with the Collateral
Agent and pledged or assigned hereunder;

     (c) as of the date hereof, except as set forth in the proviso to Section 1(a)(i), the
Pledged Stock and Pledged Securities set forth on Schedule II constitute all of the shares
of capital stock and other Equity Interests and all debt securities owned by such Pledgor;

     (d) such Pledgor (i) has the power and authority to pledge the Securities Collateral in
the manner hereby done or contemplated and (ii) will defend its title or interest thereto or
therein against any and all Liens (other than the Liens created by this Agreement or Liens
permitted by Section 6.02 of the Credit Agreement), however arising, of all Persons
whomsoever;

     (e) by virtue of (i) the execution and delivery by the Pledgors of this Agreement, when
the Pledged Securities, certificates or other documents representing or evidencing the
Securities Collateral are delivered to the Collateral Agent in accordance with this
Agreement or (ii) in the case of uncertificated Equity Interests, the filing of a UCC
financing statement in such Pledgor’s jurisdiction of organization or formation, the
Collateral Agent will obtain a valid and perfected lien upon and first priority security
interest in such Pledged Securities as security for the payment and performance of the
Obligations subject only to Liens permitted by Section 6.02 of the Credit Agreement;
provided, however, that, for the avoidance of doubt, the representations

-3-

 

set forth in this clause (e) shall not be made with respect to, or construed in
accordance with, the laws of any jurisdiction other than the United States, any State
thereof or the District of Columbia;

     (f) all of the Pledged Stock issued by a corporation has been duly authorized and
validly issued and is fully paid and, to the extent applicable, nonassessable;

     (g) all of the Pledged Debt Securities issued by any Pledgor have been duly authorized,
executed and delivered and are the enforceable obligations of the issuer thereof subject to
the effect of bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforceability of creditors’ rights generally and to general principles of equity,
regardless of whether considered in a proceeding in equity or at law; and

     (h) all information set forth herein relating to the Pledged Securities is accurate and
complete in all material respects as of the date hereof.

          SECTION 4. Registration in Nominee Name; Denominations. The Collateral Agent, on behalf of
the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged
Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the
name of the Pledgors, endorsed or assigned in blank or in favor of the Collateral Agent;
provided that the Collateral Agent shall only exercise such right to hold the Pledged
Securities in its own name as pledgee or the name of its nominee (as pledgee or as sub-agent) if an
Event of Default has occurred and is continuing. After the occurrence and during the continuance
of an Event of Default, each Pledgor will promptly provide the Collateral Agent with copies of any
written notices or other written communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. After the occurrence and during the continuance of any
Event of Default, the Collateral Agent shall at all times have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or larger denominations
for any purpose consistent with this Agreement.

          SECTION 5. Voting Rights; Dividends and Interest, etc.

     (a) Unless and until an Event of Default shall have occurred and be continuing:

     (i) Each Pledgor shall have the right to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Securities or any part thereof
for any purpose not inconsistent with the terms of this Agreement, the Credit Agreement and
the other Loan Documents; provided, however, that such Pledgor will not be
entitled to exercise any such right if the result thereof would reasonably be expected to
materially and adversely affect the rights and remedies of any of the Secured Parties under
this Agreement, the Credit Agreement or any other Loan Document or the ability of the
Collateral Agent or any other Secured Parties to exercise the same;

     (ii) The Collateral Agent shall execute and deliver to each Pledgor, or cause to be
executed and delivered to each Pledgor, all such proxies, powers of attorney and other
instruments as such Pledgor may reasonably request for the purpose of enabling such Pledgor
to exercise the voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above and to receive the cash dividends it is entitled to
receive pursuant to subparagraph (iii) below; and

     (iii) Subject to the next sentence, each Pledgor shall be entitled to receive and
retain any and all cash dividends, interest, principal and other amounts paid on the Pledged
Securities to

-4-

 

the extent and only to the extent that such cash dividends, interest, principal and
other amounts are permitted by, and otherwise paid in accordance with, the terms and
conditions of the Credit Agreement, the other Loan Documents and applicable laws. All
noncash dividends, interest, principal and other amounts, and all dividends, interest,
principal and other amounts paid or payable in cash or otherwise in connection with a
partial or total liquidation or dissolution, return of capital, capital surplus or paid-in
surplus, and all other distributions (other than distributions referred to in the preceding
sentence) made on or in respect of the Pledged Securities, whether paid or payable in cash
or otherwise, whether resulting from a subdivision, combination or reclassification of the
outstanding capital stock of the issuer of any Pledged Securities or received in exchange
for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which such issuer may be a
party or otherwise, shall be and become part of the Securities Collateral, and, if received
by any Pledgor, shall be promptly delivered to the Collateral Agent in the same form as so
received (with any necessary endorsement); provided that dividends, interest,
principal and other amounts paid in cash shall be required to be delivered to the Collateral
Agent only after the occurrence and during the continuance of any Event of Default.

          (b) Upon the occurrence and during the continuance of an Event of Default and following
written notice from the Collateral Agent to Pledgor, all rights of any Pledgor to dividends,
interest, principal or other amounts that such Pledgor is authorized to receive pursuant to
paragraph (a)(iii) above shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain
such dividends, interest, principal or other amounts. All dividends, interest, principal or other
amounts received by the Pledgor contrary to the provisions of this Section 5 shall be received in
trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of
such Pledgor and shall within five (5) Business Days after receipt thereof be delivered to the
Collateral Agent in the same form as so received (with any necessary endorsement). Any and all
money and other property paid over to or received by the Collateral Agent pursuant to the
provisions of this paragraph (b) shall be applied in accordance with the provisions of Section 7.
The Collateral Agent shall be under no obligation with respect to the investment of such cash
dividends, interest or principal, including, for the avoidance of doubt, any requirement to invest
such cash dividends, interest or principal in any class of investment, interest-bearing or
otherwise.

          (c) Upon the occurrence and during the continuance of an Event of Default and following
written notice from the Collateral Agent to Pledgor, all rights of any Pledgor to exercise the
voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of
this Section 5, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section
5, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which
shall have the sole and exclusive right and authority to exercise such voting, managerial and
consensual rights and powers; provided that any failure by Collateral Agent to give such
written notice to Pledgor shall not limit or otherwise affect any of Collateral Agent’s rights and
remedies hereunder. After all Events of Default have been cured or waived, such Pledgor will have
the right to exercise the voting and consensual rights and powers that it would otherwise be
entitled to exercise pursuant to the terms of paragraph (a)(i) above and receive the payments,
proceeds, dividends, distributions, monies, compensation, property, assets, instruments or rights,
which it would be authorized to receive and retain pursuant to the terms of paragraph (a)(iii)
above.

          SECTION 6. Remedies upon Event of Default. Upon the occurrence and during the continuance of
an Event of Default, subject to applicable regulatory and legal requirements, the Collateral Agent
may sell or otherwise dispose of the Securities Collateral, or any part thereof, at public or
private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate. Each such purchaser at any such
sale shall hold the property

-5-

 

sold absolutely free from any claim or right on the part of any Pledgor, and, to the extent
permitted by applicable law, the Pledgors hereby waive all rights of redemption, stay, valuation
and appraisal any Pledgor now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted.

          The Collateral Agent shall give a Pledgor 10 days’ prior written notice (which each Pledgor
agrees is reasonable notice within the meaning of Section 9-611 of the Uniform Commercial Code as
in effect in the State of New York or its equivalent in other jurisdictions (the “UCC”)) of
the Collateral Agent’s intention to make any sale or other disposition of such Pledgor’s Securities
Collateral. Such notice, in the case of a public sale, shall state the time and place for such
sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the
board or exchange at which such sale is to be made and the day on which the Securities Collateral,
or portion thereof, will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such place or places as
the Collateral Agent may fix and state in the notice of such sale. At any such sale, the
Securities Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The
Collateral Agent shall not be obligated to make any sale of any Securities Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of such Securities Collateral
shall have been given. The Collateral Agent may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the time and place to
which the same was so adjourned. In case any sale of all or any part of the Securities Collateral
is made on credit or for future delivery, the Securities Collateral so sold may be retained by the
Collateral Agent until the sale price is paid in full by the purchaser or purchasers thereof, but
the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall
fail to take up and pay for the Securities Collateral so sold and, in case of any such failure,
such Securities Collateral may be sold again upon like notice. At any public (or, to the extent
permitted by applicable law, private) sale made pursuant to this Section 6, any Secured Party may
bid for or purchase, free from any right of redemption, stay, valuation or appraisal on the part of
any Pledgor (all said rights being also hereby waived and released), the Securities Collateral or
any part thereof offered for sale and may make payment on account thereof by using any Obligation
then due and payable to such Secured Party from any Pledgor as a credit against the purchase price,
and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to any Pledgor therefor. For purposes hereof, (a) a
written agreement to purchase the Securities Collateral or any portion thereof shall be treated as
a sale thereof, (b) the Collateral Agent shall be free to carry out such sale pursuant to such
agreement and (c) no Pledgor shall be entitled to the return of the Securities Collateral or any
portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall
have entered into such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon
it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose upon the
Securities Collateral and to sell the Securities Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver.

          Each Pledgor recognizes that, by reason of certain prohibitions contained in the Securities
Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in effect being
called the “Federal Securities Laws”) and applicable state securities laws, the Collateral
Agent may be compelled, with respect to any sale of all or any part of the Securities Collateral
conducted without prior registration or qualification of such Securities Collateral under the
Federal Securities Laws and/or such state securities laws, to limit purchasers to those who will
agree, among other things, to acquire the Securities Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sale may be at prices and on terms less favorable than those obtainable

-6-

 

through a public sale without such restrictions (including a public offering made pursuant to
a registration statement under the Federal Securities Laws) and, notwithstanding such
circumstances, each Pledgor agrees that the fact that any such sale is conducted as a private sale
shall not, in and of itself, cause such sale to not be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to engage in public sales
and no obligation to delay the sale of any Securities Collateral for the period of time necessary
to permit the issuer thereof to register it for a form of public sale requiring registration under
the Federal Securities Laws or under applicable state securities laws, even if such issuer would,
or should, agree to so register it. If the Collateral Agent determines to exercise its right to
sell any or all of the Securities Collateral, upon written request, each Pledgor shall and shall
cause each issuer of any Pledged Stock to be sold hereunder, each partnership and each limited
liability company, in each case, which is a Subsidiary of such Pledgor, from time to time to
furnish to the Collateral Agent all such information as the Collateral Agent may request in order
to determine the number and nature of interest, shares or other instruments included in the
Securities Collateral which may be sold by the Collateral Agent in exempt transactions under the
Federal Securities Laws and the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.

          SECTION 7. Application of Proceeds of Sale. The proceeds of any sale of Securities Collateral
pursuant to Section 6, as well as any Securities Collateral consisting of cash, shall be applied by
the Collateral Agent as provided in the Security Agreement.

          SECTION 8. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor hereby appoints the
Collateral Agent the attorney-in-fact of such Pledgor for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument that the Collateral
Agent may deem reasonably necessary to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest, provided that the Collateral Agent shall only
take any action pursuant to such appointment upon the occurrence and during the continuation of an
Event of Default. Without limiting the generality of the foregoing, the Collateral Agent shall
have the right, upon the occurrence and during the continuance of an Event of Default, with full
power of substitution either in the Collateral Agent’s name or in the name of such Pledgor, to ask
for, demand, sue for, collect, receive and give acquittance for any and all moneys due or to become
due under and by virtue of any Securities Collateral, to endorse checks, drafts, orders and other
instruments for the payment of money payable to the Pledgor representing any interest or dividend
or other distribution payable in respect of the Securities Collateral or any part thereof or on
account thereof and to give full discharge for the same, to settle, compromise, prosecute or defend
any action, claim or proceeding with respect thereto, and to sell, assign, endorse, pledge,
transfer and to make any agreement respecting, or otherwise deal with, the same; provided,
however, that nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by the Collateral Agent, or to present or file any claim or notice, or to take
any action with respect to the Securities Collateral or any part thereof or the moneys due or to
become due in respect thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a result of the exercise
of the powers granted to them herein, and neither they nor their officers, directors, employees or
agents shall be responsible to any Pledgor for any act or failure to act hereunder, except for
their own gross negligence, willful misconduct or bad faith.

          SECTION 9. Waivers; Amendment.

          (a) No failure or delay of the Collateral Agent in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or power. The rights and
remedies of the Collateral Agent hereunder and of the other Secured Parties under the other Loan
Documents are cumulative

-7-

 

and are not exclusive of any rights or remedies that they would otherwise have. No waiver of
any provisions of this Agreement or any other Loan Document or consent to any departure by any
Pledgor therefrom shall in any event be effective unless the same shall be permitted by paragraph
(b) below, and then such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on any Pledgor in any case shall entitle such
Pledgor or any other Pledgor to any other or further notice or demand in similar or other
circumstances.

          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into in accordance with Section 9.08 of
the Credit Agreement.

          SECTION 10. Securities Act, etc. In view of the position of the Pledgors in relation to the
Pledged Securities, or because of other current or future circumstances, a question may arise under
the Federal Securities Laws or equivalent legislation in any other jurisdiction with respect to any
disposition of the Pledged Securities permitted hereunder. Each Pledgor understands that
compliance with the Federal Securities Laws or equivalent legislation in any other jurisdiction
might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent was
to attempt to dispose of all or any part of the Pledged Securities, and might also limit the extent
to which or the manner in which any subsequent transferee of any Pledged Securities could dispose
of the same. Similarly, there may be other legal restrictions or limitations affecting the
Collateral Agent in any attempt to dispose of all or part of the Pledged Securities under
applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect.
Each Pledgor recognizes that in light of such restrictions and limitations the Collateral Agent
may, with respect to any sale of the Pledged Securities, limit the purchasers to those who will
represent and agree, among other things, to acquire such Pledged Securities for their own account
for investment, and not with a view to the distribution or resale thereof, and upon consummation of
any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Securities Collateral so sold. Each Pledgor acknowledges and
agrees that any such sale might result in prices and other terms less favorable to the seller than
if such sale were a public sale without such restrictions. In the event of any such sale, the
Collateral Agent shall incur no responsibility or liability for selling all or any part of the
Pledged Securities at a price that the Collateral Agent, in its sole and absolute discretion, may
in good faith deem reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were a public sale or if more than
a single purchaser were approached. The provisions of this Section 10 will apply notwithstanding
the existence of a public or private market upon which the quotations or sales prices may exceed
substantially the price at which the Collateral Agent sells.

          SECTION 11. Registration, etc. Each Pledgor agrees that, upon the occurrence and during the
continuance of an Event of Default hereunder, if for any reason the Collateral Agent desires to
sell any of the Pledged Securities of the Borrower at a public sale, it will, at any time and from
time to time, upon the reasonable written request of the Collateral Agent, use its commercially
reasonable efforts to take or to cause the issuer of such Pledged Securities to take such action
and prepare, distribute, file and/or cause to become effective such documents as are required or
advisable in the reasonable opinion of counsel for the Collateral Agent to permit the public sale
of such Pledged Securities. Each Pledgor further agrees to indemnify, defend and hold harmless the
Collateral Agent, each other Secured Party, any underwriter and their respective officers,
directors, affiliates and controlling Persons (collectively, “indemnitees”) from and
against all loss, liability, expenses, costs of counsel (including, without limitation, reasonable
fees and out-of-pocket expenses to the Collateral Agent of legal counsel) and claims (including the
reasonable costs of investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material fact contained in
any prospectus (or any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a material fact required
to be stated therein or necessary

-8-

 

to make the statements in any thereof not misleading, except insofar as the same may have been
caused by any untrue statement or omission based upon information furnished in writing to such
Pledgor or the issuer of such Pledged Securities by the Collateral Agent or any other Secured Party
expressly for use therein. Each Pledgor further agrees, upon such written request refereed to
above, to use its reasonable best efforts to qualify, file or register, or cause the issuer of such
Pledged Securities to qualify, file or register, any of the Pledged Securities under the Blue Sky
or other securities laws of such states as may be requested by the Collateral Agent and keep
effective, or cause to be kept effective, all such qualifications, filings or registrations. Each
Pledgor will bear all reasonable costs and expenses of carrying out its obligations under this
Section 11. Each Pledgor acknowledges that there is no adequate remedy at law for failure by it to
comply with the provisions of this Section 11 and that such failure would not be adequately
compensable in damages, and therefore agrees that its agreements contained in this Section 11 may
be specifically enforced.

          SECTION 12. Termination or Release.

          (a) This Agreement and the security interests granted hereby (i) shall automatically terminate
when all the Loan Obligations (other than unasserted contingent indemnification obligations or
other contingent obligations, in each case, not due and payable) have been paid in full and no
Letters of Credit are outstanding pursuant to the Credit Agreement unless arrangements reasonably
satisfactory to the Issuer have been made to eliminate the Issuer’s credit risk with respect to
such L/C Obligation and all Commitments have terminated (at which time the Collateral Agent shall
execute and deliver to each Pledgor, at such Pledgor’s expense, all UCC termination statements or
their equivalent in any other jurisdiction and other documents which such Pledgor shall reasonably
request to evidence such termination) and (ii) shall continue to be effective or shall be
reinstated, as the case may be, if at any time any payment in respect of any Obligation is
rescinded or must otherwise be restored by any Secured Party upon any bankruptcy or reorganization
of any Pledger or otherwise. Any execution and delivery of termination statements or documents
pursuant to this Section 12(a) shall be without recourse to or warranty by the Collateral Agent. A
Subsidiary Guarantor shall automatically be released from its obligations hereunder and the
Security Interests in the Collateral of such Subsidiary Guarantor shall be automatically released
in the event that (x) the Equity Interests of such Subsidiary Guarantor shall be sold, transferred
or otherwise disposed of pursuant to a transaction permitted under the Credit Agreement to a Person
that is not an Affiliate of Borrower such that such Person is no longer a Restricted Subsidiary of
Borrower or (y) such Subsidiary Grantor ceases to be a Restricted Subsidiary as a result of a
transaction permitted under the Credit Agreement.

          (b) Upon any sale or other transfer by any Pledgor of any Securities Collateral that is
permitted under the Credit Agreement to any Person that is not a Loan Party, or upon the
effectiveness of any written consent to the release of the security interests granted hereby in any
Securities Collateral pursuant to Section 9.08 of the Credit Agreement, the security interests in
such Securities Collateral shall be automatically released.

          (c) In connection with any termination or release pursuant to paragraph (a) or (b), the
Collateral Agent shall execute and deliver to any Pledgor, at such Pledgor’s expense, all
documents, including the certificates representing the applicable Pledged Securities that have been
delivered to the Collateral Agent or, in the event of any such certificate has been lost, mutilated
or destroyed, an affidavit of lost certificate, that such Pledgor shall reasonably request to
evidence such termination or release. Any execution and delivery of documents pursuant to this
Section 12 shall be without recourse to or warranty by the Collateral Agent.

          SECTION 13. Notices. All communications and notices hereunder shall (except as otherwise
expressly permitted herein) be in writing and given as provided in Section 9.01 of the Credit

-9-

 

Agreement. All communications and notices hereunder to any Subsidiary Guarantor shall be
given to it c/o the Borrower at the Borrower’s address as provided in Section 9.01 of the Credit
Agreement, with a copy to the Borrower.

          SECTION 14. Further Assurances. Each Pledgor agrees to do such further acts and things, and
to execute and deliver such additional conveyances, assignments, agreements and instruments, as the
Collateral Agent may at any time reasonably request in writing in connection with the
administration and enforcement of this Agreement or with respect to the Securities Collateral or
any part thereof or in order to assure and confirm unto the Collateral Agent, its rights and
remedies hereunder.

          SECTION 15. Binding Effect; Several Agreement. This Agreement shall be binding upon each
Pledgor and the Collateral Agent and their respective successors and permitted assigns, and shall
inure to the benefit of each Pledgor, the Collateral Agent and the other Secured Parties and their
respective permitted successors and assigns, except that no Pledgor shall have the right to assign
or transfer its rights or obligations hereunder or any interest herein or in the Securities
Collateral (and any such assignment or transfer shall be void) except as permitted by the Credit
Agreement or any other Loan Document. This Agreement shall be construed as a separate agreement
with respect to each Pledgor and may be amended, modified, supplemented, waived or released with
respect to any Pledgor without the approval of any other Pledgor and without affecting the
obligations of any other Pledgor hereunder.

          SECTION 16. Survival of Agreement; Severability.

          (a) All covenants, agreements, representations and warranties made by any Pledgor herein and
in the certificates or other instruments prepared or delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been relied upon by the
Collateral Agent and the other Secured Parties and shall survive the making by the Lenders of the
Loans, regardless of any investigation made by the Secured Parties or on their behalf, and shall
continue in full force and effect until this Agreement shall terminate.

          (b) In the event any one or more of the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired thereby (it
being understood that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions. It is understood and agreed among the parties
that this Agreement shall create separate security interests in the Securities Collateral securing
the Obligations as provided in Section 1, and that any determination by any court with jurisdiction
that the security interest securing any Obligation or class of Obligations is invalid for any
reason shall not in and of itself invalidate the Security Interests securing any other Obligations
hereunder.

          SECTION 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

          SECTION 18. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, when taken together, shall constitute a
single contract. Delivery of an executed counterpart of a signature page to this Agreement by
facsimile or other electronic transmission (e.g., “PDF” or “tif” via e-mail) shall be as effective
as delivery of a manually executed counterpart of this Agreement.

-10-

 

          SECTION 19. Rules of Interpretation. The rules of interpretation specified in the Credit
Agreement (including Section 1.03 thereof) shall be applicable to this Agreement. Section headings
used herein are for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting, this Agreement.

          SECTION 20. Jurisdiction; Consent to Service of Process.

          (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America for the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding
may be heard and determined in such New York State court or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent or any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Pledgor or its properties in the
courts of any jurisdiction.

          (b) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
or the other Loan Documents in any New York State or Federal court referred to in paragraph (a) of
this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

          (c) Each party to this Agreement irrevocably consents to service of process in the manner
provided for in Section 9.15 of the Credit Agreement. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner permitted by law.

          SECTION 21. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS.

          SECTION 22. Additional Pledgors. To the extent any Subsidiary shall be required to become a
Pledgor pursuant to any Loan Document, upon execution and delivery by the Collateral Agent and such
Subsidiary of an instrument in the form of Annex I attached to the Security Agreement, such
Subsidiary shall become a Pledgor hereunder with the same force and effect as if originally named
as a Pledgor herein. The execution and delivery of any such instrument shall not require the
consent of any other Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall
remain in full force and effect notwithstanding the addition of any new Pledgor as a party to this
Agreement.

          SECTION 23. Financing Statements. Each Pledgor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) and amendments thereto that contain the information required
by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment relating to the Securities Collateral, including (i) whether such
Pledgor is an organization, the type of organization and any organizational identification number
issued to such Pledgor

-11-

 

and (ii) any financing or continuation statements or other documents without the signature of
such Pledgor where permitted by law, including the filing of a financing statement describing the
Securities Collateral as “all assets of the debtor whether now
owned or hereafter acquired”(or
using words of similar import). Each Pledgor agrees to provide all information described in the
immediately preceding sentence to the Collateral Agent promptly upon written request. Each Pledgor
hereby ratifies its authorization for the Collateral Agent to file in any relevant jurisdiction any
financing statements relating to the Collateral if filed prior to the date hereof.

          SECTION 24. INTERCREDITOR AGREEMENT GOVERNS. Notwithstanding anything to the contrary
contained herein, the liens and security interest granted to the Collateral Agent and the exercise
of any right or remedy by the Collateral Agent hereunder, in each case, may become subject to the
provisions of the First Lien Intercreditor Agreement. In the event of any conflict between the
terms of the First Lien Intercreditor Agreement and the terms of this Agreement, the terms of the
First Lien Intercreditor Agreement shall govern and control.

          SECTION 25. Conflicts. In the case of any conflict between this Agreement and the Credit
Agreement, the provisions of the Credit Agreement shall govern.

[Signature Pages Follow]

-12-

 

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

	 	 	 	 	 
	 	SOLUTIA INC.

 	 
	 	By:  	/s/ James M. Sullivan
 	 
	 	 	Name:  	James M. Sullivan 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Treasurer 	 
	 
	 	CPFILMS INC.

 	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	FLEXSYS AMERICA CO.

 	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	FLEXSYS AMERICA L.P.

 	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	  James A Tichenor	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	MONCHEM INTERNATIONAL, INC.

 	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	SOLUTIA BUSINESS ENTERPRISES INC.

 	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 

S-1

 

	 	 	 	 	 

	 	 	 	 	 
	 	SOLUTIA INTER-AMERICA, INC.

 	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	SOLUTIA OVERSEAS, INC.

 	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A Tichenor 	 
	 	 	Title:  	Vice President and Treasurer 	 

S-2

 

	 	 	 	 	 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY

AMERICAS,

as Collateral Agent

 	 
	 	By:  	/s/ Erin Morrissey
 	 
	 	 	Name:  	Erin Morrissey 	 
	 	 	Title:  	Vice President 	 
	 
	 	By:  	
/s/ Carin Keegan
 	 
	 	 	Name:  	Carin Keegan 	 
	 	 	Title:  	Director 	 

S-3

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