Document:

EXHIBIT 10.2

 

Execution
Copy

 

US
GUARANTY

 

This US GUARANTY (this “US Guaranty”), dated as
of January    , 2005, by and among the Guarantors
identified as such on the signature page hereof (each, a “Guarantor” and
collectively, “Guarantors”), and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation, individually and as agent (in such
capacity, “US Agent”) for itself and the US Lenders and the Collateral
Agent (as such terms are defined in the Credit Agreement hereinafter defined)
from time to time signatory to the Credit Agreement.

 

W
I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement
dated as of the date hereof by and among RESOLUTION PERFORMANCE PRODUCTS INC., a Delaware corporation (“Holdings”),
RESOLUTION PERFORMANCE PRODUCTS LLC, a Delaware limited liability company (“RPP
USA”, and together with any other Credit Party (as defined below) that is
approved by the US Lenders to be a US Borrower thereunder, each, individually,
a “US Borrower” and, collectively and jointly and severally, the “US
Borrowers”), RESOLUTION
EUROPE B.V, a company organized under the laws of The Netherlands (“Netherlands Op. Co.”, and together with any other Credit Party
(as defined below) that is approved by the Netherlands Lenders to be a
Netherlands Borrower thereunder, each, individually, a “Netherlands Borrower” and, collectively and jointly and
severally, the “Netherlands
Borrowers”
and together with the US Borrowers, each, individually, a “Borrower” and, collectively (but not jointly and
severally), the “Borrowers”), the other
persons designated as “Credit Parties” on the signature pages thereof,
the US Lenders, GENERAL
ELECTRIC CAPITAL CORPORATION, as US Agent, US L/C Issuer and as collateral
agent (in such capacity, “Collateral
Agent”), the
Netherlands Lenders, and GE LEVERAGED LOANS LIMITED, as Netherlands Agent,
Netherlands L/C Issuer and Netherlands Security Trustee
(as from time to time amended, restated, supplemented or otherwise modified,
the “Credit Agreement”), Lenders have agreed to make Loans to, and incur
Letter of Credit Obligations for the benefit of, Borrowers;

 

WHEREAS, Guarantors are, in the case of Holdings, the
parent corporation of RPP USA and a Credit Party, and in the case of all other
Guarantors, Domestic Subsidiaries of a US Borrower and Credit Parties, and as
such will derive direct and indirect economic benefits from the making of the
Loans and other financial accommodations provided to US Borrowers pursuant to
the Credit Agreement; and

 

WHEREAS, in order to induce US Agent and US Lenders to
enter into the Credit Agreement and other Loan Documents and to induce US
Lenders to make the US Revolving Credit Advances and US Swing Line Advances
(collectively, “US Loans”) and to incur US Letter of Credit Obligations
as provided for in the Credit Agreement, Guarantors have agreed to guarantee
payment of the US Obligations;

 

 

NOW, THEREFORE, in consideration of the premises and
the covenants hereinafter contained, and to induce US Lenders to provide the US
Loans and other financial accommodations under the Credit Agreement, it is
agreed as follows:

 

1.                                       DEFINITIONS.

 

Capitalized terms used herein shall have the meanings
assigned to them in the Credit Agreement, unless otherwise defined herein.

 

References to this “US Guaranty” shall mean this US
Guaranty, including all amendments, modifications and supplements and any
annexes, exhibits and schedules to any of the foregoing, and shall refer to
this US Guaranty as the same may be in effect at the time such reference
becomes operative.

 

2.                                       THE GUARANTY.

 

2.1                                 Guaranty
of Guaranteed Obligations of US Borrower. 
Each Guarantor hereby jointly and severally unconditionally guarantees
to US Agent and US Lenders, and their respective successors, endorsees,
transferees and assigns, the prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of the US Obligations of US
Borrowers (hereinafter the “Guaranteed Obligations”).  Guarantors agree that this US Guaranty is a
guaranty of payment and performance and not of collection, and that their
obligations under this US Guaranty shall be primary, absolute and
unconditional, irrespective of, and unaffected by:

 

(a)                                  the
genuineness, validity, regularity, enforceability or any future amendment of,
or change in this US Guaranty, any other Loan Document or any other agreement,
document or instrument to which any US Credit Party is or may become a party;

 

(b)                                 the
absence of any action to enforce this US Guaranty or any other Loan Document or
the waiver or consent by US Agent and/or US Lenders with respect to any of the
provisions thereof;

 

(c)                                  the
existence, value or condition of, or failure to perfect its Lien against, any
US Collateral for the Guaranteed Obligations or any action, or the absence of
any action, by US Agent and/or Collateral Agent in respect thereof (including,
without limitation, the release of any such security); or

 

(d)                                 the
insolvency of any US Credit Party; or

 

(e)                                  any
other action or circumstances which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor,

 

it being agreed by each Guarantor that its obligations
under this US Guaranty shall not be discharged until the US Termination
Date.  Each Guarantor shall be regarded,
and shall be in the same position, as principal debtor with respect to the
Guaranteed Obligations.  Each Guarantor
agrees that any notice or directive given at any time to US Agent which is
inconsistent with the waiver in the immediately preceding sentence shall be
null and void and may be ignored by US

 

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Agent and US Lenders, and, in addition, may not be
pleaded or introduced as evidence in any litigation relating to this US
Guaranty for the reason that such pleading or introduction would be at variance
with the written terms of this US Guaranty, unless US Agent and US Lenders have
specifically agreed otherwise in writing. 
It is agreed among each Guarantor, US Agent and US Lenders that the
foregoing waivers are of the essence of the transaction contemplated by the
Loan Documents and that, but for this US Guaranty and such waivers, US Agent
and US Lenders would decline to enter into the Credit Agreement.

 

2.2                                 Demand
by US Agent or US Lenders.  In
addition to the terms of the US Guaranty set forth in Section 2.1
hereof, and in no manner imposing any limitation on such terms, it is expressly
understood and agreed that, if, at any time, the outstanding principal amount
of the Guaranteed Obligations under the Credit Agreement (including all accrued
interest thereon) is declared to be or shall become immediately due and
payable, then Guarantors shall, without demand, pay to the holders of the
Guaranteed Obligations the entire outstanding Guaranteed Obligations due and
owing to such holders.  Payment by
Guarantors shall be made to US Agent in immediately available funds to an
account designated by US Agent or at the address set forth herein for the
giving of notice to US Agent or at any other address that may be specified in
writing from time to time by US Agent, and shall be credited and applied to the
Guaranteed Obligations.

 

2.3                                 Enforcement
of US Guaranty.  In no event shall US
Agent or Collateral Agent have any obligation (although it is entitled, at its
option) to proceed against any Borrower or any other US Credit Party or any US
Collateral pledged to secure Guaranteed Obligations before seeking satisfaction
from any or all of the Guarantors, and US Agent or Collateral Agent may
proceed, prior or subsequent to, or simultaneously with, the enforcement of US
Agent’s or Collateral Agent’s rights hereunder, to exercise any right or remedy
which it may have against any US Collateral, as a result of any Lien it may
have as security for all or any portion of the Guaranteed Obligations.

 

2.4                                 Waiver.  In addition to the waivers contained in Section 2.1
hereof, Guarantors waive, and agree that they shall not at any time insist
upon, plead or in any manner whatever claim or take the benefit or advantage
of, any appraisal, valuation, stay, extension, marshaling of assets or redemption
laws, or exemption, whether now or at any time hereafter in force, which may
delay, prevent or otherwise affect the performance by Guarantors of their
Guaranteed Obligations under, or the enforcement by US Agent, Collateral Agent
or US Lenders of, this US Guaranty. Guarantors hereby waive diligence,
presentment and demand (whether for non-payment or protest or of acceptance,
maturity, extension of time, change in nature or form of the Guaranteed
Obligations, acceptance of further security, release of further security,
composition or agreement arrived at as to the amount of, or the terms of, the
Guaranteed Obligations, notice of adverse change in any US Borrower’s financial
condition or any other fact which might increase the risk to Guarantors) with respect
to any of the Guaranteed Obligations or all other demands whatsoever and waive
the benefit of all provisions of law which are or might be in conflict with the
terms of this US Guaranty.  Guarantors
represent, warrant and jointly and severally agree that, as of the date of this
US Guaranty, their obligations under this US Guaranty are not subject to any
offsets or defenses against US Agent, Collateral Agent or US Lenders or any US
Credit Party of any kind.  Guarantors
further jointly and severally agree that their obligations under this US
Guaranty shall not be subject to any counterclaims, offsets or

 

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defenses against US Agent or any US Lender or against
any US Credit Party of any kind which may arise in the future.

 

2.5                                 Benefit
of US Guaranty.  The provisions of
this US Guaranty are for the benefit of US Agent and US Lenders and their
respective successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between any US Credit Party and US Agent, Collateral
Agent or US Lenders, the obligations of any US Credit Party under the Loan
Documents.  In the event all or any part
of the Guaranteed Obligations are transferred, indorsed or assigned by US
Agent, Collateral Agent or any US Lender to any Person or Persons, any
reference to “US Agent”, “Collateral Agent” or “US Lender” herein shall be
deemed to refer equally to such Person or Persons.

 

2.6                                 Modification
of Guaranteed Obligations, Etc.  Each
Guarantor hereby acknowledges and agrees that US Agent, Collateral Agent and US
Lenders may at any time or from time to time, with or without the consent of,
or notice to, Guarantors or any of them:

 

(a)                                  change
or extend the manner, place or terms of payment of, or renew or alter all or
any portion of, the Guaranteed Obligations;

 

(b)                                 take
any action under or in respect of the Loan Documents in the exercise of any
remedy, power or privilege contained therein or available to it at law, equity
or otherwise, or waive or refrain from exercising any such remedies, powers or
privileges;

 

(c)                                  amend
or modify, in any manner whatsoever, the Loan Documents;

 

(d)                                 extend
or waive the time for any US Credit Party’s performance of, or compliance with,
any term, covenant or agreement on its part to be performed or observed under
the Loan Documents, or waive such performance or compliance or consent to a
failure of, or departure from, such performance or compliance;

 

(e)                                  take
and hold US Collateral for the payment of the Guaranteed Obligations guaranteed
hereby or sell, exchange, release, dispose of, or otherwise deal with, any
property pledged, mortgaged or conveyed, or in which US Agent, Collateral Agent
or US Lenders have been granted a Lien, to secure any Guaranteed Obligations;

 

(f)                                    release
anyone who may be liable in any manner for the payment of any amounts owed by
any US Credit Party to US Agent, Collateral Agent or any US Lender;

 

(g)                                 modify
or terminate the terms of any intercreditor or subordination agreement pursuant
to which claims of other creditors of any US Credit Party are subordinated to
the claims of US Agent, Collateral Agent and US Lenders; and/or

 

(h)                                 apply
any sums by whomever paid or however realized to any amounts owing by any
Credit Party to US Agent, Collateral Agent or any US Lender in such manner as
US Agent or any US Lender shall determine in its discretion;

 

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and US Agent, Collateral Agent and US Lenders shall
not incur any liability to Guarantors as a result thereof, and no such action
shall impair or release the Guaranteed Obligations of Guarantors or any of them
under this US Guaranty.

 

2.7                                 Reinstatement.  This US Guaranty shall remain in full force
and effect and continue to be effective should any petition be filed by or against
any US Credit Party or any Guarantor for liquidation or reorganization, should
any US Credit Party or any Guarantor become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all
or any significant part of such US Credit Party’s or such Guarantor’s assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Guaranteed Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by US Agent, Collateral Agent or any US
Lender, whether as a “voidable preference”, “fraudulent conveyance”, or
otherwise, all as though such payment or performance had not been made.  In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Guaranteed
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

 

2.8                                 Waiver
of Subrogation, Etc.  Notwithstanding
anything to the contrary in this US Guaranty, or in any other Loan
Document,  each Guarantor hereby:

 

(a)                                  expressly
and irrevocably waives, on behalf of itself and its successors and assigns
(including any surety), any and all rights at law or in equity to subrogation,
to reimbursement, to exoneration, to contribution, to indemnification, to set
off or to any other rights that could accrue to a surety against a principal,
to a guarantor against a principal, to a guarantor against a maker or obligor,
to an accommodation party against the party accommodated, to a holder or
transferee against a maker, or to the holder of any claim against any Person,
and which such Guarantor may have or hereafter acquire against any US Credit
Party in connection with or as a result of such Guarantor’s execution, delivery
and/or performance of this US Guaranty, or any other documents to which such
Guarantor is a party or otherwise; and

 

(b)                                 acknowledges
and agrees (i) that this waiver is intended to benefit US Agent and US Lenders
and shall not limit or otherwise effect any Guarantor’s liability hereunder or
the enforceability of this US Guaranty, and (ii) that US Agent, Collateral
Agent, US Lenders and their respective successors and assigns are intended
third party beneficiaries of the waivers and agreements set forth in this Section 2.8
and their rights under this Section 2.8 shall survive payment in
full of the Guaranteed Obligations.

 

2.9                                 Election
of Remedies.  If US Agent and/or Collateral
Agent may, under applicable law, proceed to realize benefits under any of the
Loan Documents giving US Agent, Collateral Agent and US Lenders a Lien upon any
US Collateral owned by any US Credit Party, either by judicial foreclosure or
by non-judicial sale or enforcement, US Agent or Collateral Agent may, at its
sole option, determine which of such remedies or rights it may pursue without
affecting any of such rights and remedies under this US Guaranty.  If, in the exercise of any of its rights and remedies,
US Agent or Collateral Agent shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any US Credit Party,
whether because

 

5

 

of any applicable laws pertaining to “election of
remedies” or the like, Guarantors hereby consent to such action by US Agent or
Collateral Agent and waive any claim based upon such action, even if such
action by US Agent or Collateral Agent shall result in a full or partial loss
of any rights of subrogation which Guarantors might otherwise have had but for
such action by US Agent or Collateral Agent. 
Any election of remedies which results in the denial or impairment of
the right of US Agent or Collateral Agent to seek a deficiency judgment against
any Credit Party shall not impair each Guarantor’s obligation to pay the full
amount of the Guaranteed Obligations.  In
the event US Agent shall bid at any foreclosure or trustee’s sale or at any
private sale permitted by law or the Loan Documents, US Agent or Collateral
Agent may bid all or less than the amount of the Guaranteed Obligations and the
amount of such bid need not be paid by US Agent or Collateral Agent but shall
be credited against the Guaranteed Obligations. 
The amount of the successful bid at any such sale shall be conclusively
deemed to be the fair market value of the collateral and the difference between
such bid amount and the remaining balance of the Guaranteed Obligations shall
be conclusively deemed to be the amount of the Guaranteed Obligations
guaranteed under this US Guaranty, notwithstanding that any present or future
law or court decision or ruling may have the effect of reducing the amount of
any deficiency claim to which US Agent or Collateral Agent and US Lenders might
otherwise be entitled but for such bidding at any such sale.

 

2.10                           Funds
Transfers.  If any Guarantor shall
engage in any transaction as a result of which any Borrower is required to make
a mandatory prepayment with respect to the Guaranteed Obligations under the
terms of the Credit Agreement (including any issuance or sale of such Guarantor’s
Stock or any sale of its assets), such Guarantor shall distribute to, or make a
contribution to the capital of, one or more of the Borrowers an amount equal to
the mandatory prepayment required under the terms of the Credit Agreement.

 

3.                                       DELIVERIES.

 

In a form reasonably satisfactory to US Agent,
Guarantors shall deliver to US Agent (with sufficient copies for each US
Lender), concurrently with the execution of this US Guaranty and the Credit
Agreement, the Loan Documents and other instruments, certificates and documents
as are required to be delivered by Guarantors to US Agent under the Credit
Agreement.

 

4.                                       OMITTED.

 

5.                                       FURTHER
ASSURANCES.

 

Each Guarantor agrees, upon the written request of US
Agent, Collateral Agent or any US Lender, to execute and deliver to US Agent,
Collateral Agent or such US Lender, from time to time, any additional
instruments or documents reasonably considered necessary by US Agent or such US
Lender to cause this US Guaranty to be, become or remain valid and effective in
accordance with its terms.

 

6.                                       PAYMENTS
FREE AND CLEAR OF TAXES.

 

All payments required to be made by each Guarantor
hereunder shall be made to US Agent, Collateral Agent and US Lenders free and
clear of, and without deduction for, any

 

6

 

and all present and future Taxes.  If any Guarantor shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder, (a) the sum
payable shall be increased as much as shall be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 6) US Agent, Collateral Agent or US
Lenders, as applicable, receive an amount equal to the sum they would have
received had no such deductions been made, (b) such Guarantor shall make such
deductions, and (c) such Guarantor shall pay the full amount deducted to the
relevant taxing or other authority in accordance with Applicable Law.  Within thirty (30) days after the date of any
payment of Taxes, each applicable Guarantor shall furnish to US Agent the
original or a certified copy of a receipt evidencing payment thereof. Each
Guarantor shall jointly and severally indemnify and, within ten (10) days of
demand therefor, pay US Agent, Collateral Agent and each US Lender for the full
amount of Taxes (including any Taxes imposed by any jurisdiction on amounts
payable under this Section 6) paid by US Agent, Collateral Agent or
such US Lender, as appropriate, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or
not such Taxes were correctly or legally asserted.  Notwithstanding the foregoing, in no event
shall US Agent, Collateral Agent or any US Lender be entitled to receive a
gross-up amount in excess of that amount to which it would be entitled under
the Credit Agreement with respect to the Guaranteed Obligations.

 

7.                                       OTHER
TERMS.

 

7.1                                 Entire
Agreement.  This US Guaranty,
together with the other Loan Documents, constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements relating to a guaranty of the loans and advances under the
Loan Documents and/or the Guaranteed Obligations.

 

7.2                                 Headings.  The headings in this US Guaranty are for
convenience of reference only and are not part of the substance of this US
Guaranty.

 

7.3                                 Severability.  Whenever possible, each provision of this US
Guaranty shall be interpreted in such a manner to be effective and valid under
Applicable Law, but if any provision of this US Guaranty shall be prohibited by
or invalid under Applicable Law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this US Guaranty.

 

7.4                                 Notices.  Whenever it is provided herein that any
notice, demand, request, consent, approval, declaration or other communication
shall or may be given to or served upon any of the parties by any other party,
or whenever any of the parties desires to give or serve upon another any such
communication with respect to this US Guaranty, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be addressed to the party to be notified as follows:

 

(a)                                  If
to US Agent, at:

 

GENERAL
ELECTRIC CAPITAL CORPORATION

335 Madison Avenue

 

7

 

New York, New York 10017

ATTN:  RPP Account Officer

Fax:  (212) 370-8767

 

With a copy
to:

 

GENERAL ELECTRIC CAPITAL CORPORATION

201 Merritt 7

Norwalk, Connecticut  06851

ATTN:  Corporate Counsel

Global Sponsor Finance

Fax:  (203) 956-4216

 

(b)                                 If
to any US Lender, at the address of such US Lender specified in the Credit
Agreement.

 

(c)                                  If
to any Guarantor, at the address of such Guarantor specified on Schedule I
hereto.

 

or at such other address as may be substituted by notice given as
herein provided.  The giving of any
notice required hereunder may be waived in writing by the party entitled to
receive such notice.  Every notice,
demand, request, consent, approval, declaration or other communication
hereunder shall be deemed to have been validly served, given or delivered (i)
upon the earlier of actual receipt and three (3) Business Days after the same
shall have been deposited with the United States mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (ii) upon transmission,
when sent by telecopy or other similar facsimile transmission (with such
telecopy or facsimile promptly confirmed by delivery of a copy by personal
delivery or United States mail as otherwise provided in this Section 7.4),
(iii) one (1) Business Day after deposit with a reputable overnight carrier
with all charges prepaid, or (iv) when delivered, if hand-delivered by
messenger.

 

7.5                                 Successors
and Assigns.  This US Guaranty and
all obligations of Guarantors hereunder shall be binding upon the successors
and assigns of each Guarantor (including a debtor-in-possession on behalf of
such Guarantor) and shall, together with the rights and remedies of US Agent,
for itself and for the benefit of US Lenders, hereunder, inure to the benefit
of US Agent and US Lenders, all future holders of any instrument evidencing any
of the US Obligations and their respective successors and assigns.  No sales of participations, other sales,
assignments, transfers or other dispositions of any agreement governing or
instrument evidencing the US Obligations or any portion thereof or interest
therein shall in any manner affect the rights of US Agent and US Lenders
hereunder.  Guarantors may not assign,
sell, hypothecate or otherwise transfer any interest in or obligation under
this US Guaranty.

 

7.6                                 No
Waiver; Cumulative Remedies; Amendments. 
Neither US Agent, Collateral Agent nor any US Lender shall by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
US Agent and then only to the extent therein set forth.  A waiver by US Agent or Collateral Agent, for
itself and the ratable benefit of US Lenders, of any right or remedy

 

8

 

hereunder on any one occasion shall not be construed
as a bar to any right or remedy which US Agent or Collateral Agent would
otherwise have had on any future occasion. 
No failure to exercise nor any delay in exercising on the part of US
Agent, Collateral Agent or any US Lender, any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
future exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies
hereunder provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law.  None of the terms or provisions of this US
Guaranty may be waived, altered, modified, supplemented or amended except by an
instrument in writing, duly executed by US Agent and Guarantors.

 

7.7                                 Termination.  This US Guaranty is a continuing guaranty and
shall remain in full force and effect until the US Termination Date.  Upon payment and performance in full of the
Guaranteed Obligations, US Agent shall deliver to Guarantors such documents as
Guarantors may reasonably request to evidence such termination.

 

7.8                                 Counterparts.  This US Guaranty may be executed in any
number of counterparts, each of which shall collectively and separately
constitute one and the same agreement.

 

7.9                                 Limitation
on Guaranteed Obligations. 
Notwithstanding any provision herein contained to the contrary, each
Guarantor’s liability hereunder shall be limited to an amount not to exceed as
of any date of determination the greater of:

 

(a)                                  the
net amount of all US Loans and other extensions of credit (including US Letters
of Credit) advanced under the Credit Agreement and directly or indirectly
re-loaned or otherwise transferred to, or incurred for the benefit of, such
Guarantor, plus interest thereon at the applicable rate specified in the Credit
Agreement; and

 

(b)                                 the
amount which could be claimed by the US Agent, Collateral Agent and US Lenders
from such Guarantor under this US Guaranty without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law after taking into
account, among other things, such Guarantor’s right of contribution and
indemnification from each other Guarantor under Section 7.10.

 

7.10                           Contribution
with Respect to Guaranteed Obligations.

 

(a)                                  To
the extent that any Guarantor shall make a payment under this US Guaranty of
all or any of the Guaranteed Obligations (a “Guarantor Payment”) which,
taking into account all other Guarantor Payments then previously or
concurrently made by the other Guarantors, exceeds the amount which such
Guarantor would otherwise have paid if each Guarantor had paid the aggregate
Guaranteed Obligations satisfied by such Guarantor Payment in the same
proportion that such Guarantor’s “Allocable Amount” (as defined below) (as
determined immediately prior to such Guarantor Payment) bore to the aggregate
Allocable Amounts of all of Guarantors as determined immediately prior to the
making of such Guarantor Payment, then, following payment in full in
cash of the

 

9

 

Guaranteed
Obligations and termination of the US Commitments, such Guarantor shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each of the other Guarantors for the amount of such excess, pro
rata based upon their respective Allocable Amounts in effect immediately
prior to such Guarantor Payment.

 

(b)                                 As
of any date of determination, the “Allocable Amount” of any Guarantor
shall be equal to the maximum amount of the claim which could then be recovered
from such Guarantor under this US Guaranty without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.

 

(c)                                  This
Section 7.10 is intended only to define the relative rights of
Guarantors and nothing set forth in this Section 7.10 is intended
to or shall impair the obligations of Guarantors, jointly and severally, to pay
any amounts as and when the same shall become due and payable in accordance
with the terms of this US Guaranty.

 

(d)                                 The
rights of the parties under this Section 7.10 shall be exercisable
upon the full payment in cash of the US Obligations
and the termination of the US
Commitments and US Letters of Credit.

 

(e)                                  The
parties hereto acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets of any Guarantor to which such contribution
and indemnification is owing.

 

8.                                       SECURITY.

 

To secure payment of each Guarantor’s obligations
under this US Guaranty, concurrently with the execution of this US Guaranty,
each Guarantor has entered into a Security Agreement pursuant to which each
Guarantor has granted to Collateral Agent for the benefit of US Lenders a
security interest in substantially all of its personal property and has entered
into a Pledge Agreement pursuant to which each Guarantor has pledged all of the
Stock of each of its Domestic Subsidiaries to Collateral Agent for the benefit
of US Lenders.

 

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IN WITNESS WHEREOF, the parties hereto have executed
and delivered this US Guaranty as of the date first above written.

 

	
   

  	
  RESOLUTION PERFORMANCE PRODUCTS INC., as a

  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Thomas Bausch

  	
   

  
	
   

  	
  Title: 
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RPP CAPITAL CORPORATION, as a Guarantor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Bausch

  	
   

  
	
   

  	
  Title: 
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION, as

  US Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly A. Massa

  	
   

  
	
   

  	
  Title: 
  Duly Authorized Signatory

  	
   

  
						

 

[Signature
Page to US Guaranty]

 

 

SCHEDULE I

 

Resolution Performance Products Inc.

RPP Capital Corporation

 

 

c/o Resolution Performance Products LLC

1600 Smith Street, 24th Floor

Houston, Texas  77002

ATTN:  Chief Financial Officer
and

Global Treasurer

Fax:  817-375-2305

 

12Exhibit
10.3

 

Execution
Copy

 

 

SECOND AMENDED AND RESTATED US SECURITY
AGREEMENT

 

among

 

RESOLUTION PERFORMANCE PRODUCTS INC.,

RESOLUTION PERFORMANCE PRODUCTS LLC,

RPP CAPITAL CORPORATION,

 

VARIOUS SUBSIDIARIES OF

RESOLUTION PERFORMANCE PRODUCTS INC.

 

and

 

GENERAL ELECTRIC CAPITAL CORPORATION,

as Collateral Agent

 

 

Dated as of November 14, 2000

 

and

 

Amended and Restated as of April 9, 2003,

Amended as of December 22, 2003

 

and

 

Amended and Restated as of the Second
Restatement Effective Date

 

 

 

TABLE OF CONTENTS

 

 

	
  ARTICLE I

  	
  SECURITY INTERESTS

  	
   

  
	
   

  	
  1.1.

  	
  Grant of Security Interests

  	
   

  
	
   

  	
  1.2.

  	
  Power of Attorney

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  
	
   

  	
  2.1.

  	
  Necessary Filings

  	
   

  
	
   

  	
  2.2.

  	
  No Liens

  	
   

  
	
   

  	
  2.3.

  	
  Other Financing Statements

  	
   

  
	
   

  	
  2.4.

  	
  Chief Executive Office; Records

  	
   

  
	
   

  	
  2.5.

  	
  Location of Inventory and Equipment

  	
   

  
	
   

  	
  2.6.

  	
  Trade Names; Change of Name

  	
   

  
	
   

  	
  2.7.

  	
  Legal
  Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting
  Utility); Jurisdiction of Organization; Location; Organizational
  Identification Numbers; Changes Thereto; etc.

  	
   

  
	
   

  	
  2.8.

  	
  Recourse

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT
  RIGHTS; INSTRUMENTS

  	
   

  
	
   

  	
  3.1.

  	
  Additional Representations and Warranties

  	
   

  
	
   

  	
  3.2.

  	
  Maintenance of Records

  	
   

  
	
   

  	
  3.3.

  	
  Direction to Account Debtors; Contracting Parties; etc.

  	
   

  
	
   

  	
  3.4.

  	
  Modification of Terms; etc.

  	
   

  
	
   

  	
  3.5.

  	
  Collection

  	
   

  
	
   

  	
  3.6.

  	
  Instruments

  	
   

  
	
   

  	
  3.7.

  	
  Commercial Tort Claims

  	
   

  
	
   

  	
  3.8.

  	
  Chattel
  Paper

  	
   

  
	
   

  	
  3.9.

  	
  Further Actions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  SPECIAL PROVISIONS CONCERNING TRADEMARKS

  	
   

  
	
   

  	
  4.1.

  	
  Additional Representations and Warranties

  	
   

  
	
   

  	
  4.2.

  	
  Licenses and Agreements

  	
   

  
	
   

  	
  4.3.

  	
  Infringements

  	
   

  
	
   

  	
  4.4.

  	
  Preservation of Marks

  	
   

  
	
   

  	
  4.5.

  	
  Future Registered Marks

  	
   

  
	
   

  	
  4.6.

  	
  Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND
  TRADE SECRETS

  	
   

  
	
   

  	
  5.1.

  	
  Additional Representations and Warranties

  	
   

  
	
   

  	
  5.2.

  	
  Licenses and Assignments

  	
   

  
	
   

  	
  5.3.

  	
  Infringements

  	
   

  
	
   

  	
  5.4.

  	
  Maintenance of Patents and Copyrights

  	
   

  
	
   

  	
  5.5.

  	
  Prosecution of Patent or Copyright
  Application

  	
   

  

 

i

 

	
   

  	
  5.6.

  	
  Other Patents and Copyrights

  	
   

  
	
   

  	
  5.7.

  	
  Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  SPECIAL PROVISIONS CONCERNING MATERIAL TRACTOR TRAILERS

  	
   

  
	
   

  	
  6.1.

  	
  Additional Representations and Warranties

  	
   

  
	
   

  	
  6.2.

  	
  Maintenance of Registration

  	
   

  
	
   

  	
  6.3.

  	
  Subsequently Acquired Material Tractor
  Trailers

  	
   

  
	
   

  	
  6.4.

  	
  Remedies

  	
   

  
	
   

  	
  6.5.

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  SPECIAL PROVISIONS CONCERNING MATERIAL ROLLING STOCK

  	
   

  
	
   

  	
  7.1.

  	
  Additional Representations and Warranties

  	
   

  
	
   

  	
  7.2.

  	
  Maintenance of Ownership

  	
   

  
	
   

  	
  7.3.

  	
  Subsequently Acquired Material Rolling
  Stock

  	
   

  
	
   

  	
  7.4.

  	
  Remedies

  	
   

  
	
   

  	
  7.5.

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  PROVISIONS CONCERNING ALL COLLATERAL

  	
   

  
	
   

  	
  8.1.

  	
  Protection of Collateral Agent’s Security

  	
   

  
	
   

  	
  8.2.

  	
  Warehouse Receipts Non-Negotiable

  	
   

  
	
   

  	
  8.3.

  	
  Additional Information

  	
   

  
	
   

  	
  8.4.

  	
  Further Actions

  	
   

  
	
   

  	
  8.5.

  	
  Financing Statements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT

  	
   

  
	
   

  	
  9.1.

  	
  Remedies; Obtaining the Collateral Upon
  Default

  	
   

  
	
   

  	
  9.2.

  	
  Remedies; Disposition of the Collateral

  	
   

  
	
   

  	
  9.3.

  	
  Waiver of Claims

  	
   

  
	
   

  	
  9.4.

  	
  Application of Proceeds

  	
   

  
	
   

  	
  9.5.

  	
  Remedies Cumulative

  	
   

  
	
   

  	
  9.6.

  	
  Discontinuance of Proceedings

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  INDEMNITY

  	
   

  
	
   

  	
  10.1.

  	
  Indemnity

  	
   

  
	
   

  	
  10.2.

  	
  Indemnity Obligations Secured by Collateral; Survival

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  12.1.

  	
  Notices

  	
   

  
	
   

  	
  12.2.

  	
  Waiver;
  Amendment

  	
   

  
	
   

  	
  12.3.

  	
  Obligations
  Absolute

  	
   

  
	
   

  	
  12.4.

  	
  Successors
  and Assigns

  	
   

  
	
   

  	
  12.5.

  	
  Headings Descriptive

  	
   

  
	
   

  	
  12.6.

  	
  Governing
  Law

  	
   

  

 

 

	
   

  	
  12.7.

  	
  Assignor’s Duties

  	
   

  
	
   

  	
  12.8.

  	
  Termination;
  Release

  	
   

  
	
   

  	
  12.9.

  	
  Counterparts

  	
   

  
	
   

  	
  12.10.

  	
  The Collateral Agent and the Other
  Secured Creditors

  	
   

  
	
   

  	
  12.11.

  	
  Severability

  	
   

  
	
   

  	
  12.12.

  	
  Limited Obligations

  	
   

  
	
   

  	
  12.13.

  	
  Additional Assignors

  	
   

  
	
   

  	
  12.14.

  	
  Intercreditor Agreements

  	
   

  
	
   

  	
  12.15.

  	
  Intentionally Omitted

  	
   

  
	
   

  	
  12.16.

  	
  No Strict Constuction

  	
   

  
	
   

  	
  12.17.

  	
  Advice of Counsel

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ANNEX
  A

  	
  Schedule
  of Chief Executive Offices

  	
   

  
	
  ANNEX
  B

  	
  Schedule
  of Inventory and Equipment Locations

  	
   

  
	
  ANNEX
  C

  	
  Schedule
  of Trade and Fictitious Names

  	
   

  
	
  ANNEX
  D

  	
  Schedule
  of Legal Names, Type of Organization (and Whether a Registered Organization
  and/or a Transmitting Utility), Jurisdiction of Organization, Location and
  Organization Identification Numbers

  	
   

  
	
  ANNEX
  E

  	
  Commercial
  Tort Claims

  	
   

  
	
  ANNEX
  F

  	
  Schedule
  of Marks and Applications

  	
   

  
	
  ANNEX
  G

  	
  Schedule
  of Patents and Applications

  	
   

  
	
  ANNEX
  H

  	
  Schedule
  of Copyrights and Applications

  	
   

  
	
  ANNEX
  I

  	
  Grant
  of Security Interest in United States Trademarks

  	
   

  
	
  ANNEX
  J

  	
  Grant
  of Security Interest in United States Patents

  	
   

  
	
  ANNEX
  K

  	
  Grant
  of Security Interest in United States Copyrights

  	
   

  
	
  ANNEX
  L

  	
  Schedule
  of Material Tractor Trailers

  	
   

  
	
  ANNEX
  M

  	
  Schedule
  of Material Rolling Stock

  	
   

  
	
  ANNEX
  N

  	
  The
  Collateral Agent

  	
   

  

 

 

SECOND AMENDED AND RESTATED US SECURITY
AGREEMENT

 

SECOND AMENDED AND RESTATED US SECURITY AGREEMENT,
dated as of November 14, 2000, and amended and restated as of April 9,
2003, as further amended as of December 22, 2003, and as further amended and
restated as of the Second Restatement Effective Date (as defined below) (the “Security Agreement” or “this Agreement”), among each of the undersigned
Assignors (each, an “Assignor”
and, together with each other entity which becomes a party hereto pursuant to Section
12.13 hereof, collectively, the “Assignors”),
GENERAL ELECTRIC CAPITAL CORPORATION, as Collateral Agent (together with any
successor collateral agent, the “Collateral Agent”),
as successor to MORGAN STANLEY & CO., INCORPORATED (the “Original Collateral Agent”), for the
benefit of the Secured Creditors (as defined below), and agreed to by DEUTSCHE
BANK TRUST COMPANY AMERICAS, as trustee (together with any successor trustee,
the “Senior Secured Notes Trustee”) for
the benefit of the holders from time to time of the Senior Secured Notes (as
defined below), and THE BANK OF NEW YORK, as trustee (together with any
successor trustee, the “Additional Senior Secured
Notes Trustee”) for the benefit of the holders from time to time
of the Additional Senior Secured Notes (as defined below). Except as otherwise defined
herein, all capitalized terms used herein and defined in the Bank Credit Agreement
(as defined below) shall be used herein as therein defined (or, at any time on
or after the first date when all Bank Credit Document Obligations (as defined below)
shall have been repaid in full and all Letters of Credit and the Commitments
under (and as defined in) the Bank Credit Agreement, in each case, have been
terminated and thereafter for so long as no Bank Credit Agreement is in effect,
the Bank Credit Agreement as in effect on such date immediately prior to such repayment
and termination).

 

W I T N E S S E T H:

 

WHEREAS, Resolution Performance Products Inc. (“Holdings”), Resolution Performance
Products LLC (“RPP USA”), RPP Capital
Corporation (“US Finance Corp.” and,
together with RPP USA, the “Original US Borrowers”
and each, an “Original US Borrower”),
Resolution Europe B.V. (formerly known as Resolution Nederland B.V.) (the “Original Dutch Borrower”), the
lenders from time to time party thereto (the “Original
Lenders”), Salomon Smith Barney Inc., as Syndication Agent,
JPMorgan Chase Bank (formerly known as Morgan Guaranty Trust Company of New
York), as Documentation Agent, and Morgan Stanley Senior Funding, Inc., as Lead
Arranger, sole Book Manager and Administrative Agent (in such capacity, the “Original Agent”), entered into a
Credit Agreement, dated as of November 14, 2000 (as amended, modified or
supplemented through, but not including, the date hereof, the “Original Bank Credit Agreement”)
providing for the making of Loans (as defined in the Original Bank Credit
Agreement) to the Original US Borrowers and the Original Dutch Borrower and the
issuance of, and participation in, Letters of Credit (as defined in the
Original Bank Credit Agreement) for the account of the Original US Borrowers as
contemplated therein (the Original Lenders, the Original Agent, each Letter of
Credit Issuer (as defined in the Original Bank Credit Agreement) thereunder,
and the Original Collateral Agent are herein called the “Original
Bank Lender Creditors”).

 

WHEREAS, Holdings, RPP USA and certain other entities
from time to time designated as US Borrowers thereunder (the “US Borrowers”), US Finance Corp.,
Resolution Europe B.V. and certain other entities from time to time designated
as Netherlands Borrowers thereunder (the

 

 

“Netherlands
Borrowers”), the other Credit Parties from time to time party
thereto, the financial institutions from time to time party thereto as US Lenders
(the “US  Lenders”),
General Electric Capital Corporation, as US L/C Issuer, as Collateral Agent, as
a US Lender, and as US Agent (in such capacity, together with any successor
agent, the “US Agent”), the financial
institutions from time to time party thereto as Netherlands Lenders and GE
Leveraged Loans Limited, as Netherlands L/C Issuer, as Netherlands Security
Trustee, as a Netherlands Lender, and as Netherlands Agent have entered into a
Credit Agreement, dated as of January 24, 2005 (as amended, modified, extended,
renewed, replaced, restated, supplemented or refinanced from time to time, and including
any agreement extending the maturity of, or refinancing or restructuring
(including, but not limited to, the inclusion of additional borrowers or
guarantors thereunder or any increase in the amount borrowed thereunder) all or
any portion of the indebtedness under such agreement or any successor
agreement, whether or not with the same agent, trustee, representative,
lenders, holders or group of lenders or holders, the “Bank Credit
Agreement”), providing for the refinancing in full of the
Original Bank Credit Agreement and the making of US Revolving Credit Advances
and US Swing Line Advances (collectively, “US Loans”)
to the US Borrowers and the issuance of, and participation in, US Letters of
Credit for the account of the US Borrowers as contemplated therein (the US Lenders,
the US Agent, each US L/C Issuer and the Collateral Agent are herein called the
“Bank Lender Creditors”);

 

WHEREAS, pursuant to a notice of resignation, dated
January 24, 2005 (the “Resignation”),
the Original Collateral Agent has given notice of its resignation as Collateral
Agent pursuant to Annex N to this Agreement, such resignation to be effective
as of the Second Restatement Effective Date;

 

WHEREAS, pursuant to Annex N to this Agreement, the
Required Secured Creditors have appointed General Electric Capital Corporation
as Collateral Agent, effective as of the Second Restatement Effective Date;

 

WHEREAS, the Original US Borrowers and the Additional
Senior Secured Notes Trustee have entered into an Indenture, dated as of
December 22, 2003 (as amended, modified, extended, renewed, replaced, restated,
supplemented or refinanced from time to time, and including any agreement
extending the maturity of, or refinancing or restructuring (including, but not
limited to, the inclusion of additional borrowers or guarantors thereunder or
any increase in the amount borrowed thereunder) all or any portion of the indebtedness
under such Indenture or any successor agreement whether or not with the same
trustee, representative, agent, lenders, holders or group of lenders or
holders, the “Note Credit Agreement” and,
together with the Bank Credit Agreement, collectively, the “Credit Agreement”), providing for
(i) the issuance by the Original US Borrowers of their 8% Senior Secured Notes
due December 15, 2009 (the “Additional Senior Secured
Notes”) to the holders thereof from time to time (such holders,
the “Additional Senior Secured Noteholders”
and, together with the Additional Senior Secured Notes Trustee, the “Note Lender Creditors”; and the Note
Lender Creditors and the Bank Lender Creditors are collectively the “Lender Creditors”) and (ii) the guaranty
by any future US Credit Party that is a Subsidiary Guarantor of the Original US
Borrowers’ obligations under the Note Credit Agreement and the Additional
Senior Secured Notes (each such guaranty, together with the Note Credit
Agreement and the Additional Senior Secured Notes, are herein called the “Note Credit Documents”);

 

2

 

WHEREAS, a portion of the proceeds from the issuance
of the Additional Senior Secured Notes were applied to repay in full all
remaining outstanding Term Loans (as defined in the Original Bank Credit
Agreement) under the Original Bank Credit Agreement and such issuance was otherwise
permitted by the Original Bank Credit Agreement and the Senior Secured Note
Indenture (as defined below), and, accordingly for the avoidance of doubt, the
Note Credit Agreement constitutes a part of the “Credit
Agreement” and “First Lien Obligations”
for the purposes of (and as defined in) this Agreement (until such time, if
any, as the indebtedness under the Note Credit Agreement is reclassified in
accordance with the terms thereof) but does not constitute a part of the Bank
Credit Agreement for the purposes of this Agreement;

 

WHEREAS, each US Borrower or another Assignor has
entered into, and may at any time and from time to time after the date hereof
enter into or guaranty the obligations of one or more other Assignors or
Subsidiaries thereof under, one or more US Hedge Agreements with one or more Bank
Lender Creditors or any affiliate thereof (each such Bank Lender Creditor or
affiliate, even if the respective Bank Lender Creditor subsequently ceases to
be a US Lender under the Bank Credit Agreement for any reason, together with
such Bank Lender Creditor’s or affiliate’s successors and assigns, if any,
collectively, the “Other Creditors” and,
together with the Bank Lender Creditors and the Note Lender Creditors, the “First Lien Creditors”);

 

WHEREAS, the Original US Borrowers and the Senior
Secured Notes Trustee have entered into an Indenture, dated as of April 9, 2003
(as amended, modified or supplemented from time to time, the “Senior Secured Note Indenture”), providing
for (i) the issuance by the Original US Borrowers of their 9-1/2% Senior Second
Secured Notes due April 15, 2010 (the “Senior Secured Notes”)
to the holders thereof from time to time (the “Senior
Secured Noteholders” and, together with the Senior Secured Notes
Trustee, the “Second Lien Creditors” and,
together with the First Lien Creditors, the “Secured
Creditors”) and (ii) the guaranty by any future US Credit Party
that is a Subsidiary Guarantor of the US Borrowers’ obligations under the
Senior Secured Note Indenture and the Senior Secured Notes (each such guaranty,
together with the Senior Secured Note Indenture and the Senior Secured Notes,
are herein called the “Senior Secured Note
Documents”);

 

WHEREAS, pursuant to the US Guaranty entered into
pursuant to the Bank Credit Agreement, each Assignor that is a party thereto
has guaranteed to the Bank Lender Creditors and the Other Creditors the payment
and performance when due of all Guaranteed Obligations, as described in such US
Guaranty;

 

WHEREAS, each Assignor and the Original Collateral
Agent entered into the US Security Agreement, dated as of November 14, 2000, as
amended and restated as of April 9,
2003 and as amended as of December 22, 2003 (as further amended,
modified or supplemented through, but not including, the date hereof, the “Original US Security Agreement”), in
connection with the Original Bank Credit Agreement;

 

WHEREAS, it is a condition precedent to (i) the making
of US Loans to the US Borrowers and the issuance of, and participation in, US Letters
of Credit for the account of the US Borrowers under the Bank Credit Agreement,
and (ii) the Other Creditors entering into US Hedge Agreements that each
Assignor shall have executed and delivered this Security Agreement;

 

3

 

WHEREAS, the Bank Credit Agreement is a refinancing of
the Original Bank Credit Agreement, constitutes
the “Bank Credit Agreement” under the Amended and Restated Intercreditor
Agreement (as defined below) and the US Obligations under the Bank
Credit Agreement are secured to the same extent and with the same priority as
the obligations under the Original Bank Credit Agreement pursuant to the terms
of the Original US Security Agreement;

 

WHEREAS, pursuant to the Bank Credit Agreement, the Bank
Lender Creditors have authorized the Collateral Agent to enter into an
amendment and restatement of the Original US Security Agreement in the form of
this Agreement to, inter alia, also reaffirm the grant and priority of a security
interest securing the obligations in respect of the Note Credit Documents and
the Senior Secured Note Documents on the terms and conditions set forth herein;

 

WHEREAS, the security interests granted under the
Original US Security Agreement shall continue uninterrupted and in full force
and effect from and after the Second Restatement Effective Date; and

 

WHEREAS, as of the Second
Restatement Effective Date, General Electric Capital Corporation shall
constitute the Requisite Lender Creditors and the Required Secured Creditors.

 

NOW, THEREFORE, the parties hereto agree that the
Original US Security Agreement shall be and hereby is amended and restated
effective as of the Second Restatement Effective Date in its entirety as
follows:

 

ARTICLE I

 

SECURITY INTERESTS

 

1.1.  Grant
of Security Interests.

 

(a)   As security for
the prompt and complete payment and performance when due of all of the Obligations,
each Assignor does hereby assign and transfer unto the Collateral Agent, and
does hereby pledge and grant to the Collateral Agent for the benefit of the
Secured Creditors (except as otherwise provided in clause (c) and (d) of this Section
1.1) (and, to the extent the following constitutes “Collateral” under, and
as defined in, the Original US Security Agreement, does hereby reconfirm
(without interruption) its assignment, transfer, pledge and grant to the
Collateral Agent under the Original US Security Agreement of), a continuing
security interest in, all of the right, title and interest of such Assignor in,
to and under all of the following, whether now existing or hereafter from time
to time acquired (it being understood and agreed that the security interest
granted herein (x) for the benefit of the First Lien Creditors shall be senior
in priority in all respects to the security interest granted herein for the
benefit of the Second Lien Creditors and (y) for the benefit of the Second Lien
Creditors shall be subject and subordinated in all respects to the security
interest granted herein for the benefit of the First Lien Creditors):

 

(i)            each and
every Receivable;

 

(ii)           all
Contracts, together with all Contract Rights arising thereunder;

 

4

 

(iii)          all
Inventory;

 

(iv)          all
Equipment (including, without limitation, all Tractor Trailers and Rolling
Stock);

 

(v)            any cash collateral
account established for such Assignor for the benefit of the Secured Creditors
and all monies, securities, Instruments and other investments deposited or
required to be deposited any cash collateral account;

 

(vi)          all Deposit
Accounts and all other bank, demand, time savings, cash management, passbook,
certificates of deposit and similar accounts maintained by such Assignor with
any Secured Creditor (or any affiliate, subsidiary or branch thereof, and
wherever located) or with any other Person and all monies, securities,
Instruments and other investments deposited or required to be deposited in any
of the foregoing accounts;

 

(vii)         all
Marks, together with the registrations and right to all renewals thereof, and
the goodwill of the business of such Assignor symbolized by the Marks;

 

(viii)        all
Patents and Copyrights and all reissues, renewals and extensions thereof;

 

(ix)           all
computer programs of such Assignor and all intellectual property rights therein
and all other proprietary information of such Assignor, including, but not
limited to, Domain Names, trade secrets and Trade Secret Rights;

 

(x)            all
insurance policies;

 

(xi)           all other
Goods, General Intangibles, Permits, Chattel Paper (including, without
limitation, all Tangible Chattel Paper and all Electronic Chattel Paper),
Documents, Instruments and other assets (including cash) of such Assignor;

 

(xii)          all
Commercial Tort Claims, including any Commercial Tort Claims from time to time
scheduled on Annex E hereto;

 

(xiii)         all
Letter-of-Credit Rights (whether or not the respective letter of credit is
evidenced by a writing);

 

(xiv)        all
money, cash or cash equivalents of any Assignor;

 

(xv)         all Software
and all Software licensing rights, all writings, plans, specifications and
schematics, all engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of the medium of
recording;

 

(xvi)        all
Supporting Obligations; and

 

(xvii)       all
Proceeds and products of any and all of the foregoing (all of the above,
including this clause (xvii), collectively, the “Collateral”).

 

5

 

(b)   The security
interest of the Collateral Agent under this Agreement extends to all Collateral
of the kind which is the subject of this Agreement which any Assignor may
acquire at any time during the continuation of this Agreement.

 

(c)   Notwithstanding
anything to the contrary contained in this Agreement, the Second Lien Creditors
shall not have a security interest in, and the grant of security interests pursuant
to this Section 1.1 for the benefit of the Second Lien Creditors shall not
extend to, any Second Lien Excluded Collateral and with respect to the Second
Lien Creditors the term “Collateral” shall not include the Second Lien Excluded
Collateral.

 

(d)   Notwithstanding
anything to the contrary contained in this Agreement, (i) the Note Lender
Creditors shall not have a security interest in, and the grant of security
interests pursuant to this Section 1.1 for the benefit of the Note
Lender Creditors shall not extend to, any Additional Senior Secured Notes
Excluded Collateral, and with respect to the Note Lender Creditors the “Collateral”
shall not include the Additional Senior Secured Notes Excluded Collateral, and
(ii) the Liens, rights, remedies and benefits of the Note Lender Creditors in
respect of the Collateral and this Agreement are also expressly subject to all
of the terms, provisions and conditions of the Amended and Restated Intercreditor
Agreement.

 

(e)   In addition, to
secure the prompt and complete payment, performance and observance of the
Obligations, each Assignor hereby grants to the Collateral Agent, for itself
and the benefit of Secured Creditors a right of setoff, exercisable at any time
when an Event of Default has occurred and is continuing, against the property
of such Assignor held by Collateral Agent or any Secured Creditor, consisting
of property described above in Section 1.1(a) now or hereafter in the
possession or custody of or in transit to Collateral Agent or any Secured
Creditor, for any purpose, including safekeeping, collection or pledge, for the
account of such Assignor, or as to which such Assignor may have any right or
power.

 

1.2.  Power of
Attorney.  Each
Assignor hereby constitutes and appoints the Collateral Agent its true and
lawful attorney, irrevocably, with full power after the occurrence of and
during the continuance of an Event of Default (in the name of such Assignor or
otherwise) to act, require, demand, receive, compound and give acquittance for
any and all monies and claims for monies due or to become due to such Assignor
under or arising out of the Collateral, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take
any action or institute any proceedings which the Collateral Agent may deem to
be necessary or advisable to accomplish the purposes of this Agreement, which
appointment as attorney is coupled with an interest.  NONE OF COLLATERAL AGENT, SECURED CREDITORS
OR THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES SHALL BE RESPONSIBLE TO ANY ASSIGNOR FOR ANY ACT OR FAILURE TO
ACT UNDER ANY SUCH POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES
ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS
FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

 

6

 

ARTICLE II

 

REPRESENTATIONS, WARRANTIES AND
COVENANTS

 

Each Assignor represents (as of the Second Restatement
Effective Date), warrants and covenants, which representations, warranties and
covenants shall survive execution and delivery of this Agreement, as follows:

 

2.1.  Necessary
Filings.  (i)
All filings, registrations and recordings necessary or appropriate under the
UCC to create, preserve, protect and perfect the security interest granted by
such Assignor to the Collateral Agent hereby in respect of the Collateral
(other than Tractor Trailers which are not Material Tractor Trailers to the
extent perfection must be accomplished as described in clause (x) below and
Rolling Stock which is not Material Rolling Stock to the extent perfection must
be accomplished as described in clause (y) below) have been accomplished (or
will be accomplished upon making of filings, registrations and recordings on or
about the Second Restatement Effective Date) or (x) in the case a Material
Tractor Trailer acquired after the
Second Restatement Effective Date for which a certificate of title has been
issued and for which it is necessary to record a security interest upon such
certificate of title in order to perfect a security interest in such Collateral,
such recordings will be accomplished within 90 days following the date of such
acquisition, or such later date as the Collateral Agent shall agree to in its
sole discretion, (y) in the case of Material Rolling Stock acquired after the Second Restatement Effective Date for
which a filing with the STB may be required by 49 U.S.C. Section 11301 in order
to perfect a security interest in such Material Rolling Stock, such filings
will be accomplished within 30 days following the date of the acquisition of
such Material Rolling Stock, or such later date as the Collateral Agent shall
agree to in its sole discretion, and (z) in the case of the Marks set forth on
Part II of Annex F hereto and the Patents set forth on Part II of Annex
G hereto, such filings in the United States Patent and Trademark Office
will be accomplished on or before January 24, 2005, or with respect to
after-acquired Marks or Patents at the times required by Articles IV and
V and (ii) the security interest granted to the Collateral Agent pursuant
to this Agreement in and to the Collateral constitutes (or, in the case of
Collateral subject to clauses (x), (y) and (z) above, upon compliance with such
clauses, will constitute) a perfected security interest therein prior to the
rights of all other Persons therein (except for Persons holding Permitted
Liens) and subject to no other Liens (other than Permitted Liens) and is
entitled to all the rights, priorities and benefits afforded by the UCC, 49
U.S.C. Section 11301 (with respect to the Rolling Stock) or other relevant law
as enacted in any relevant jurisdiction to perfected security interests, in
each case to the extent that the Collateral consists of the type of property in
which a security interest may be perfected by filing a financing statement
under the UCC as enacted in any relevant jurisdiction, by filing with the STB
pursuant to 49 U.S.C. Section 11301 (in the case of Material Rolling Stock), by
notation on a certificate of title (in the case of Material Tractor Trailers)
or by a filing of a Grant of Security Interest in the respective form attached
hereto in the United States Patent and Trademark Office or in the United States
Copyright Office.

 

2.2.  No Liens.  Such Assignor is, and as to Collateral
acquired by it from time to time after the date hereof such Assignor will be,
the owner of all Collateral free from any Lien of any Person (other than
Permitted Liens) and such Assignor shall defend the Collateral against all

 

7

 

claims and demands of all Persons (other than
Persons holding Permitted Liens) at any time claiming the same or any interest
therein adverse to the Collateral Agent.

 

2.3.  Other
Financing Statements.  As of the
Second Restatement Effective Date, there is no financing statement
evidencing a valid security interest against Holdings or any of its
Subsidiaries (or similar statement or instrument of registration under the law
of any jurisdiction) covering or purporting to cover any interest of any kind
in the Collateral (other than those evidencing Permitted Liens), and so long as
the Termination Date has not occurred, such Assignor will not execute or
authorize to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction) or
statements relating to the Collateral, except financing statements filed or to
be filed in respect of and covering the security interests granted hereby by
such Assignor or in connection with Permitted Liens.

 

2.4.  Chief
Executive Office.  The chief executive office of such Assignor
on the Second Restatement Effective Date (or in the case of any Assignor that
becomes a party hereto after the Second Restatement Effective Date pursuant to Section
12.13, on the date such Assignor becomes a party hereto) is located at the
address indicated on Annex A hereto for such Assignor.

 

2.5.  Location of Inventory and
Equipment.  All
Inventory and Equipment (other than Tractor Trailers and Rolling Stock) held by
each Assignor on the Second Restatement Effective Date (or in the case of any Assignor
that becomes party hereto after the Second Restatement Effective Date pursuant
to Section 12.13 hereto, on the date such Assignor becomes a party
hereto) is located at one of the locations shown on Annex B hereto or is
in transit between such locations.

 

2.6.  Trade
Names; Change of Name.  No Assignor has or operates in any
jurisdiction under, or previously has had or has operated in any jurisdiction
within the five year period preceding the date of this Agreement under, any
trade names, fictitious names or other names except its legal name and such
other trade or fictitious names as are listed on Annex C hereto for such
Assignor.

 

2.7.  Legal Names; Type of Organization (and Whether a
Registered Organization and/or a Transmitting Utility); Jurisdiction of
Organization; Location; Organizational Identification Numbers; Changes Thereto;
etc. 
The exact legal name of each Assignor, the type of organization of such Assignor,
whether or not such Assignor is a Registered Organization, the jurisdiction of organization
of such Assignor, such Assignor’s Location, the organizational identification
number (if any) of such Assignor, and whether or not such Assignor is a
Transmitting Utility, is listed on Annex D hereto for such Assignor.
Such Assignor shall not change its legal name, its type of organization, its
status as a Registered Organization (in the case of a Registered Organization),
its status as a Transmitting Utility or as a Person which is not a Transmitting
Utility, as the case may be, its jurisdiction of organization, its Location, or
its organizational identification number (if any) from that used on Annex D
hereto for such Assignor, except that any such changes shall be permitted (so
long as not in violation of the applicable requirements of the Secured Debt
Agreement and so long as same do not involve (x) a Registered Organization
ceasing to constitute same or (y) such Assignor changing its jurisdiction of
organization or Location from the United States or a State thereof to a
jurisdiction of

 

8

 

organization or Location, as the case may be,
outside the United States or a State thereof) if (i) it shall have given to the
Collateral Agent not less than 30 days’ prior written notice (or such lesser
number of days’ prior written notice as the Collateral Agent may allow in its
sole discretion) of each change to the information listed on Annex D
hereto for such Assignor (as adjusted for any subsequent changes thereto previously
made in accordance with this sentence), together with a supplement to such Annex
D which shall correct all information contained therein for such Assignor,
and (ii) in connection with the respective such change or changes, it shall
have taken all action reasonably requested by the Collateral Agent to maintain
the security interests of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.  Upon Collateral Agent’s request, not more
frequently than once during each calendar quarter, each Assignor shall provide
to Collateral Agent a certificate of good standing from its state of incorporation
or organization.

 

2.8.  Recourse.  This Agreement is made with full recourse to
each Assignor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
other Secured Debt Agreements and otherwise in writing in connection herewith
or therewith.

 

ARTICLE III

 

SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND OTHER COLLATERAL

 

3.1.  Additional Representations and
Warranties. 
As of the time when each of its Receivables arises, each Assignor shall
be deemed to have represented and warranted that such Receivable, and all
records, papers and documents relating thereto (if any) are genuine and in all
material respects what they purport to be, and that all papers and documents
(if any) relating thereto (i) will represent the genuine legal, valid and
binding (except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors’ rights and by equitable principles, regardless
of whether enforcement is sought in equity or law) obligation of the account
debtor evidencing indebtedness unpaid and owed by the respective account debtor
arising out of the performance of labor or services or the sale or lease and
delivery of the inventory, materials, equipment or merchandise listed therein,
or both, (ii) will be the only original writings evidencing and embodying such
obligation of the account debtor named therein (other than copies created for
general accounting purposes) and (iii) will be in compliance and will conform in
all material respects with all applicable federal, state and local laws and applicable
laws of any relevant foreign jurisdiction.

 

3.2.  Maintenance
of Records. 
Each Assignor will keep and maintain at its own cost and expense
satisfactory and complete records of its Receivables, Chattel Paper,
Instruments and Contracts, including, but not limited to, originals or copies
of all documentation (including each Contract) with respect thereto, records of
all payments received, all credits granted thereon, all merchandise returned
and all other dealings therewith, and such Assignor will make the same
available on such Assignor’s premises to the Collateral Agent for inspection,
at such Assignor’s own cost and expense, at any and all reasonable times and
intervals as the Collateral Agent may request. Upon the occurrence and during
the continuance of an Event of Default and at the

 

9

 

request of the Collateral Agent, such Assignor
shall, at its own cost and expense, deliver all tangible evidence of its Receivables
and Contract Rights (including, without limitation, all documents evidencing
the Receivables and all Contracts) and such books and records to the Collateral
Agent or to its representatives (copies of which evidence and books and records
may be retained by such Assignor). In addition, if the Collateral Agent so
directs, such Assignor shall legend, in form and manner satisfactory to the
Collateral Agent, the Receivables and the Contracts, as well as books, records
and documents of such Assignor evidencing or pertaining to such Receivables and
Contracts with an appropriate reference to the fact that such Receivables and
Contracts have been assigned to the Collateral Agent and that the Collateral
Agent has a security interest therein.

 

3.3.  Direction
to Account Debtors; Contracting Parties; etc.  Upon the occurrence and during the continuance
of an Event of Default, and if the Collateral Agent so directs any Assignor,
such Assignor agrees (x) to cause all payments on account of the Receivables,
Chattel Paper, Instruments and Contracts to be made directly to a lockbox or
blocked account subject to a tri-party agreement pursuant to Section 2.9 of the
Bank Credit Agreement or to such cash collateral account or other account as
Collateral Agent shall require, (y) that the Collateral Agent may, at its
option, directly notify the obligors with respect to any Receivables and/or
under any Contracts to make payments with respect thereto as provided in
preceding clause (x), and (z) that the Collateral Agent may enforce collection
of any such Receivables, Chattel Paper, Instruments and Contracts and may
adjust, settle or compromise the amount of payment thereof, in the same manner
and to the same extent as such Assignor. Upon the occurrence and during the
continuance of an Event of Default, without notice to or assent by any Assignor,
the Collateral Agent may apply any or all amounts then in, or thereafter
deposited in, any such account in the manner provided in Section 9.4 hereof.
The costs and expenses (including attorneys’ fees) of collection, whether
incurred by the Assignor or the Collateral Agent, shall be borne by such Assignor.

 

3.4.  Modification
of Terms; etc. 
No Assignor shall rescind or cancel any indebtedness evidenced by any
Receivable, Chattel Paper or Instrument, or modify any term thereof or make any
adjustment with respect thereto, or extend or renew the same, or compromise or
settle any material dispute, claim, suit or legal proceeding relating thereto,
or sell any Receivable, Chattel Paper or Instrument, or interest therein,
without the prior written consent of the Collateral Agent, except as permitted
by Section 3.5 hereof. No Assignor shall rescind or cancel any
indebtedness evidenced by any Contract, or modify any term thereof or make any
adjustment with respect thereto, or extend or renew the same, or compromise or
settle any material dispute, claim, suit or legal proceeding relating thereto,
or sell any Contract, or interest therein, without the prior written consent of
the Collateral Agent, except (i) as permitted by Section 3.5 hereof and
(ii) to the extent that the aggregate cost to Holdings and its Subsidiaries of
any such rescission, cancellation, modification, adjustment, extension, compromise,
settlement or sale is not reasonably likely to have a Material Adverse Effect.
Each Assignor will duly fulfill all material obligations on its part to be
fulfilled under or in connection with the Receivables and Contracts, and no Assignor
will do anything to impair in any material respect the rights of the Collateral
Agent in the Receivables, except as permitted by Section 3.5 hereof.

 

3.5.  Collection.  Each Assignor shall use reasonable efforts to
endeavor to cause to be collected from the account debtor named in each of its Receivables
or Chattel Paper or obligor

 

10

 

under any Contract or Instrument, as and when
due (including, without limitation, amounts, services or products which are
delinquent, such amounts, services or products to be collected in accordance
with generally accepted lawful collection procedures) any and all amounts, services
or products owing under or on account of such Receivable, Chattel Paper,
Instrument or Contract, and apply forthwith upon receipt thereof all such
amounts, services or products as are so collected to the outstanding balance of
such Receivable, Chattel Paper or Instrument or under such Contract, except
that, prior to the occurrence of an Event of Default, any Assignor may allow in
the ordinary course of business as adjustments to amounts, services or products
owing under its Receivables, Chattel Paper, Instruments and Contracts (i) an
extension or renewal of the time or times of payment or exchange, or settlement
for less than the total unpaid balance, which such Assignor finds appropriate
in accordance with reasonable business judgment and (ii) a refund or credit due
as a result of returned or damaged merchandise or improperly performed
services. The costs and expenses (including, without limitation, attorneys’
fees) of collection, whether incurred by an Assignor or the Collateral Agent,
shall be borne by the relevant Assignor.

 

3.6.  Instruments.  If any Assignor owns or acquires any Instrument
constituting Collateral (other than checks and other payment instruments
received and collected in the ordinary course of business), such Assignor will
within 10 days following such acquisition if either an Event of Default has
occurred and is continuing or such Instrument has a stated principal amount in
excess of $100,000 notify the Collateral Agent thereof, and, upon request by
the Collateral Agent, will promptly deliver such Collateral to the Collateral
Agent appropriately endorsed to the order of the Collateral Agent as further
security hereunder.  In addition, if the
Collateral Agent so directs, such Assignor shall legend, in form and manner
satisfactory to the Collateral Agent, the Instruments with an appropriate
reference to the fact that such Instruments have been assigned to the
Collateral Agent and that the Collateral Agent has a security interest therein.

 

3.7.  Commercial
Tort Claims. 
All Commercial Tort Claims of each Assignor in existence the Second
Restatement Effective Date are described in Annex E hereto. Upon the
written request of the Collateral Agent, each Assignor shall promptly furnish
to the Collateral Agent an update of Annex E hereto, and if requested by
the Collateral Agent, the respective Assignor shall grant to the Collateral
Agent a security interest in any Commercial Tort Claim set forth on such
updated Annex E and in the proceeds thereof, all upon the terms of this
Agreement, in a writing in form and substance reasonably satisfactory to the
Collateral Agent.

 

3.8.  Chattel Paper. Upon the written request of the
Collateral Agent made at any time or from time to time, each Assignor shall
promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper
held or owned by such Assignor. Furthermore, if requested by the Collateral
Agent, each Assignor shall promptly take all actions which are reasonably
practicable so that the Collateral Agent has “control” of (i) all Electronic
Chattel Paper in accordance with the requirements of Section 9-105 of the UCC
and (ii) all “transferable records” as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global and
National Commerce Act. Each Assignor will promptly (and in any event within 10
days) following any request by the Collateral Agent, deliver all of its
Tangible Chattel Paper to the Collateral Agent. 
In addition, if the Collateral Agent so directs, such Assignor shall
legend, in form and manner satisfactory to the Collateral Agent, the Chattel
Paper with an appropriate

 

11

 

reference to the fact that such Instruments
have been assigned to the Collateral Agent and that the Collateral Agent has a
security interest therein.

 

3.9.  Letters of Credit.  Each Assignor that is or becomes the beneficiary
of a letter of credit shall, within five (5) days after the written request of
the Collateral Agent, enter into a tri-party agreement with Collateral Agent
and the issuer and/or confirmation bank with respect to Letter-of-Credit Rights
assigning such Letter-of-Credit Rights to Collateral Agent and directing all
payments thereunder to a lockbox or blocked account subject to a tri-party
agreement pursuant to Section 2.9 of the Bank Credit Agreement, all in form and
substance reasonably satisfactory to Collateral Agent.

 

3.10.  Further Actions and Agreements.

 

(a)   Each Assignor
will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver
to the Collateral Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to its Receivables, Contracts,
Instruments, Chattel Paper and other property or rights covered by the security
interest hereby granted, as the Collateral Agent may reasonably request to
preserve and protect its security interest in the Collateral.

 

(b)   Assignor
acknowledges that it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement
filed by, or in favor of, Collateral Agent without the prior written consent of
Collateral Agent and agrees that it will not do so without the prior written
consent of Collateral Agent, subject to Assignors’ rights under Section
9-509(d)(2) of the UCC.

 

ARTICLE IV

 

SPECIAL PROVISIONS CONCERNING
TRADEMARKS

 

4.1.  Additional Representations and Warranties.  Each Assignor represents and warrants that as
of the Second Restatement Effective Date it is the true, lawful, sole and
exclusive owner of or otherwise has the right to use the Marks and Domain Names
listed in Annex F hereto for such Assignor and that said listed Marks
and Domain Names include all the United States marks or applications for United
States marks registered in the United States Patent and Trademark Office and
all Domain Names that such Assignor presently owns or uses in connection with
its business as of the Second
Restatement Effective Date. Each Assignor represents and warrants that
it owns or otherwise has the right to use all material Marks and Domain Names
that it uses. Each Assignor further warrants that it has no knowledge, as of the Second Restatement Effective Date,
of any material third party claim that any aspect of such Assignor’s present or
contemplated business operations infringes or will infringe any rights in any
trademark, service mark or trade name of any other Person. Each Assignor
represents and warrants that as of the Second Restatement Effective Date it is
the beneficial and record owner of all United States trademark registrations and
applications and Domain Name registrations listed in Annex F hereto for
such Assignor and that as of the Second Restatement Effective Date, other than
as set forth on Annex F hereto, said registrations are valid, subsisting
and have not been

 

12

 

canceled and that such Assignor is not aware
of any material third party claim that any of said registrations is invalid or
unenforceable. Each Assignor hereby grants to the Collateral Agent an absolute
power of attorney to sign, upon the occurrence and during the continuance of an
Event of Default, any document which may be required by the United States
Patent and Trademark Office or secretary of state or equivalent governmental
agency of any State of the United States or any foreign jurisdiction in order
to effect an absolute assignment of all right, title and interest in each Mark
and/or Domain Name, and record the same and upon request by Collateral Agent
each Assignor agrees to execute and deliver a power of attorney in the form of
Exhibit 4.1 hereto.

 

4.2.  Licenses
and Agreements.  Each
Assignor hereby agrees not to divest itself of any right under any Mark or
Domain Name that is material to the business of such Assignor absent prior
written approval of the Collateral Agent, except as otherwise permitted by the
Secured Debt Agreements.

 

4.3.  Infringements.  Each Assignor
agrees, promptly upon learning thereof, to notify the Collateral Agent in
writing of the name and address of, and to furnish such pertinent information
that is available to such Assignor with respect to, (i) any party who such Assignor
believes is infringing or diluting or otherwise violating in any material
respect any of such Assignor’s rights in and to any Mark or Domain Name, or
(ii) any party claiming that such Assignor’s use of any Mark or Domain Name violates
in any material respect any property right of that party. Each Assignor further
agrees, unless otherwise agreed by the Collateral Agent, to prosecute, in
accordance with reasonable business practices, any Person infringing any Mark
or Domain Name.

 

4.4.  Preservation
of Marks. 
Each Assignor agrees to use its Marks and Domain Names in interstate or
foreign commerce, as the case may be, during the time in which this Agreement
is in effect sufficiently to preserve such Marks as valid and subsisting trademarks
or service marks under the laws of the United States or the relevant foreign
jurisdiction; provided that no Assignor shall be obligated to preserve any Mark
while no Event of Default is continuing to the extent the Assignor determines,
in its reasonable business judgment, that the preservation of such Mark is no
longer desirable in the conduct of its business.

 

4.5.  Maintenance of Registration.  Each Assignor shall, at its own expense and
in accordance with reasonable business practices, process all documents
required to maintain trademark registrations, including, but not limited to,
affidavits of continued use and applications for renewals of registration in
the United States Patent and Trademark Office (or any equivalent government
agency or office in any foreign jurisdiction) for all of its material registered
Marks, and shall pay all fees and disbursements in connection therewith and
shall not abandon any such filing of affidavit of use or any such application
of renewal prior to the exhaustion of all administrative and judicial remedies
without prior written consent of the Collateral Agent; provided that no Assignor
shall be obligated to preserve any Mark to the extent such Assignor determines,
in its reasonable business judgment, that the preservation of such Mark is no
longer desirable in the conduct of its business.

 

4.6.  Future Registered
Marks. If any registration for any
Mark that is material to its business issues hereafter to any Assignor as a
result of any application now or hereafter pending

 

13

 

before the United States Patent and Trademark
Office, or any Domain Name is registered by an Assignor, within 30 days of
receipt of such certificate or similar indicia of ownership, such Assignor shall
deliver to the Collateral Agent a copy of such certificate, and an assignment
for security in such Mark and/or Domain Name, to the Collateral Agent and at
the expense of such Assignor, confirming the assignment for security in such
Mark and/or Domain Name to the Collateral Agent hereunder, the form of such
security to be substantially in the form of Annex I hereto or in such
other form as may be reasonably satisfactory to the Collateral Agent.

 

4.7.  Remedies.  If an Event of Default shall
occur and be continuing, the Collateral Agent may, by written notice to the
relevant Assignor, take any or all of the following actions: (i) declare the
entire right, title and interest of such Assignor in and to each of the Marks
and Domain Names, together with all trademark rights and rights of protection
to the same and the goodwill of such Assignor’s business symbolized by said
Marks and the right to recover for past infringements thereof, vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
rights, title and interest shall immediately vest, in the Collateral Agent for
the benefit of the Secured Creditors, and the Collateral Agent shall be
entitled to exercise the power of attorney referred to in or delivered pursuant to Section 4.1
hereof to execute, cause to be acknowledged and notarized and to record said
absolute assignment with the applicable agency; (ii) take and use or sell the
Marks or Domain Names and the goodwill of such Assignor’s business symbolized
by the Marks or Domain Names and the right to carry on the business and use the
assets of such Assignor in connection with which the Marks or Domain Names have
been used; and (iii) direct such Assignor to refrain, in which event such Assignor
shall refrain, from using the Marks or Domain Names in any manner whatsoever,
directly or indirectly, and, if requested by the Collateral Agent, change such Assignor’s
corporate name to eliminate therefrom any use of any Mark or Domain Name and execute
such other and further documents that the Collateral Agent may request to
further confirm this and to transfer ownership of the Marks or Domain Names and
registrations and any pending trademark applications therefor in the United States
Patent and Trademark Office or applicable Domain Name registrar (or, in each
case, any equivalent government agency or office in any foreign jurisdiction)
to the Collateral Agent.

 

ARTICLE V

 

SPECIAL PROVISIONS CONCERNING
PATENTS,

COPYRIGHTS AND TRADE SECRETS

 

5.1.  Additional Representations and
Warranties. 
Each Assignor represents and warrants that as of the Second Restatement
Effective Date, it is the true and lawful exclusive owner of or otherwise has
the right to use all rights in (i) all trade secrets and proprietary
information necessary to operate the business of such Assignor (the “Trade Secret Rights”), (ii) the
Patents listed in Annex G hereto for such Assignor and that said Patents
constitute all the patents and applications for patents that such Assignor now
owns and that as of the Second Restatement
Effective Date are necessary in the conduct of the business of such Assignor
as currently conducted and (iii) the Copyrights listed in Annex H hereto
for such Assignor and that said Copyrights constitute all the United States
copyrights registered with the United States Copyright Office and applications
for United States copyrights that such Assignor owns as of the

 

14

 

Second Restatement Effective Date
and that are necessary in the conduct of the business of such Assignor as
currently conducted. Each Assignor further represents and warrants that it has
the exclusive right to use and practice under all Patents and Copyrights that
it owns and has the exclusive right to exclude others from using or practicing
under any Patents it owns, except as otherwise permitted by the Secured Debt
Agreements. Each Assignor further warrants that, as of the Second Restatement Effective Date, it has no knowledge of any material
third party claim that any aspect of such Assignor’s present or contemplated
business operations infringes or will infringe any rights in any patent or
copyright or such Assignor has misappropriated any trade secret or proprietary
information. Each Assignor hereby grants to the Collateral Agent an absolute
power of attorney to sign, upon the occurrence and during the continuance of
any Event of Default, any document which may be required by the United States
Patent and Trademark Office (or equivalent governmental agency in any foreign
jurisdiction) or the United States Copyright Office (or equivalent governmental
agency in any foreign jurisdiction) in order to effect an absolute assignment
of all right, title and interest in each Patent and Copyright, and to record
the same and upon request by Collateral Agent each Assignor agrees to execute
and deliver a power of attorney in the form of Exhibit 4.1 hereto.

 

5.2.  Licenses
and Assignments. 
Each Assignor hereby agrees not to divest itself of any right under any
Patent or Copyright that is material to the business of such Assignor absent
prior written approval of the Collateral Agent, except as otherwise permitted
by the Secured Debt Agreements.

 

5.3.  Infringements.  Each Assignor agrees, promptly upon learning thereof,
to furnish the Collateral Agent in writing with all pertinent information known
and available to such Assignor with respect to infringement, contributing
infringement or active inducement to infringe in any material respect in any
Patent or Copyright or to any claim that the practice of any Patent or the use
of any Copyright violates in any material respect any property right of a third
party, or with respect to any misappropriation of any Trade Secret Right or any
claim that the practice of any Trade Secret Right violates in any material respect
any property right of a third party. Each Assignor further agrees, absent
direction of the Collateral Agent to the contrary, to prosecute, in accordance
with reasonable business practices, any Person infringing in any material
respect any Patent or Copyright or any Person misappropriating in any material
respect any Trade Secret Right.

 

5.4.  Maintenance of Patents and
Copyrights. 
At its own expense, each Assignor shall make timely payment of all
post-issuance fees required pursuant to 35 U.S.C. Section 41 and any foreign
equivalent thereof to maintain in force rights under each Patent, and to apply
as permitted pursuant to applicable law for any renewal of each Copyright
absent prior written consent of the Collateral Agent; provided, that, no Assignor
shall be obligated while no Event of Default is
continuing to pay any such fees or apply for any such renewal to the
extent that such Assignor determines, in its reasonable business judgment, that
the preservation of such Patent or Copyright is no longer desirable in the
conduct of its business.

 

5.5.  Prosecution of Patent or
Copyright Application.  At its own expense, each Assignor shall
prosecute, in accordance with reasonable business practices, all applications
for (i) Patents listed in Annex G hereto and (ii) Copyrights listed in Annex
H hereto, in each case for such Assignor, and shall not abandon any such
application prior to exhaustion of all

 

15

 

administrative and judicial remedies (other
than applications deemed by such Assignor to be no longer prudent to pursue),
absent written consent of the Collateral Agent.

 

5.6.  Other
Patents and Copyrights.  Within 30 days of the acquisition or issuance
of a Patent, registration of a Copyright, or acquisition of a registered
Copyright, or of filing of an application for a Patent or Copyright, that is in
each case material to its business, the relevant Assignor shall deliver to the
Collateral Agent a copy of said Copyright registration or Patent or certificate
or registration of, or application therefor, as the case may be, with an
assignment for security as to such Patent or Copyright, as the case may be, to
the Collateral Agent and at the expense of such Assignor, confirming the
assignment for security, the form of such assignment for security to be
substantially in the form of Annex J or K hereto, as appropriate, or in such
other form as may be satisfactory to the Collateral Agent.

 

5.7.  Remedies.  If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title, and
interest of such Assignor in each of the Patents and Copyrights vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
right, title, and interest shall immediately vest in the Collateral Agent for
the benefit of the Secured Creditors, in which case the Collateral Agent shall
be entitled to exercise the power of attorney referred to in or delivered pursuant to Section 5.1
hereof to execute, cause to be acknowledged and notarized and to record said
absolute assignment with the applicable agency; (ii) take and practice or sell
the Patents, Copyrights and Trade Secret Rights; and (iii) direct such Assignor
to refrain, in which event such Assignor shall refrain, from practicing the
Patents and using the Copyrights and/or Trade Secret Rights directly or
indirectly, and such Assignor shall execute such other and further documents as
the Collateral Agent may request further to confirm this and to transfer
ownership of the Patents, Copyrights and Trade Secret Rights to the Collateral
Agent for the benefit of the Secured Creditors.

 

ARTICLE VI

 

SPECIAL PROVISIONS CONCERNING

MATERIAL TRACTOR TRAILERS

 

6.1.  Additional Representations and
Warranties. 
Each Assignor represents and warrants that, as of the Second Restatement Effective Date,
it is the true, lawful, sole and exclusive owner of the Material Tractor
Trailers of such Assignor listed on Annex L hereto and that said listed
Material Tractor Trailers constitute all of the Material Tractor Trailers that
such Assignor owns in connection with its business as of the Second Restatement Effective Date.
Each Assignor represents and warrants that all filings, registrations and
recordings necessary or appropriate to perfect the security interest granted to
the Collateral Agent in the Material Tractor Trailers listed on Annex L
and covered by this Agreement have been accomplished, and such security
interests are perfected under applicable law. Each Assignor hereby grants to
the Collateral Agent an absolute power of attorney to sign, upon the occurrence
and during the continuance of an Event of Default, any document which may be
required by the relevant governmental agency of any state or province in order
to effect an absolute assignment of all right, title and interest in each
Material Tractor Trailer, and register the same and upon request

 

16

 

by Collateral Agent each Assignor agrees to
execute and deliver a power of attorney in the form of Exhibit 4.1 hereto.

 

6.2.  Maintenance
of Registration. 
Each Assignor shall, at its own expense and in accordance with
reasonable business practices, process all documents required by the relevant
state and provincial governmental agencies to maintain vehicle registrations,
for all of its owned Material Tractor Trailers.

 

6.3.  Subsequently Acquired Material
Tractor Trailers. 
Within 90 days following the acquisition of any Material Tractor Trailer
after the Second Restatement Effective
Date (or such later date as the Collateral Agent shall agree in writing
in its sole discretion), the relevant Assignor shall, at its own expense, cause
a security interest in favor of the Collateral Agent to be recorded on the certificate
of title for such Material Tractor Trailer and cause each such certificate of
title to be filed in the relevant jurisdiction in which such Material Tractor
Trailer is registered. Each Assignor agrees to execute all documentation
reasonably required to effect such recordations and to cause the filing of
relevant certificates of title with the appropriate state or provincial
governmental agency.

 

6.4.  Remedies.  If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title, and
interest of such Assignor in each of the Material Tractor Trailers vested in
the Collateral Agent for the benefit of the Secured Creditors, in which event
such right, title, and interest shall immediately vest in the Collateral Agent
for the benefit of the Secured Creditors, in which case the Collateral Agent
shall be entitled to exercise the power of attorney referred to in or delivered pursuant to Section 6.1
hereof to execute, cause to be acknowledged and notarized and to record said
absolute assignment with the applicable agency; (ii) take and use or sell the
Material Tractor Trailers; and (iii) request such Assignor to (whereupon such Assignor
shall) deliver all of the certificates of title for each Material Tractor
Trailer owned by such Assignor to the Collateral Agent.

 

6.5.  Further
Assurances. 
Each Assignor will, at its own expense, make execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
lists, descriptions and designations of its owned Material Tractor Trailers
(including certificate of title numbers and jurisdictions of registration of
each such Material Tractor Trailer), documents of title, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the Material Tractor
Trailers constituting Collateral and other property or rights covered by the
security interest hereby granted, which the Collateral Agent deems reasonably
appropriate or advisable to perfect, preserve or protect its security interest
in the Material Tractor Trailers constituting Collateral.

 

17

 

ARTICLE VII

 

SPECIAL PROVISIONS CONCERNING

MATERIAL ROLLING STOCK

 

7.1.  Additional Representations and
Warranties. 
Each Assignor represents and warrants that, as of the Second Amendment
Effective Date, it is the true, lawful, sole and exclusive owner of the Units
of Material Rolling Stock of such Assignor listed on Annex M hereto and
that said listed Material Rolling Stock constitute all of the Material Rolling
Stock that such Assignor owns in connection with its business as of the Second
Amendment Effective Date.  Each Assignor
represents and warrants that all filings, registrations and recordings
necessary or appropriate to perfect the security interest granted to the
Collateral Agent in all of the Units of Material Rolling Stock of such Assignor
listed on Annex M have been accomplished, and such security interests
are perfected under applicable law.  Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of an Event of Default,
any document which may be required by the STB or any other relevant governmental
agency of any jurisdiction in order to effect an absolute assignment of all
right, title and interest in each Unit of Material Rolling Stock owned by such Assignor,
and register the same and upon request by Collateral Agent each Assignor agrees
to execute and deliver a power of attorney in the form of Exhibit 4.1 hereto.

 

7.2.  Maintenance
of Ownership. 
Each Assignor shall, at its own expense and in accordance with
reasonable business practices, process all documents required by the STB and
any other relevant state and provincial governmental agencies to maintain
ownership of all Units of Material Rolling Stock owned by such Assignor.

 

7.3.  Subsequently Acquired Material
Rolling Stock. 
Within 30 days following the acquisition of any Unit of Material Rolling
Stock after the Second Amendment Effective Date (or such later date as the
Collateral Agent shall agree in writing in its sole discretion), the relevant Assignor
shall, at its own expense, take all actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to create, preserve, protect and
perfect the security interest of the Collateral Agent in such Unit of Material
Rolling Stock (or interest therein) intended to be granted hereby, including
filing the security interest with the STB pursuant to (and to the extent required
by) 49 U.S.C. Section 11301 or any successor statute.

 

7.4.  Remedies.  If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title, and
interest of such Assignor in each Unit of Material Rolling Stock vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
right, title, and interest shall immediately vest in the Collateral Agent for
the benefit of the Secured Creditors, in which case the Collateral Agent shall
be entitled to exercise the power of attorney referred to in or delivered pursuant to Section 7.1
hereof to execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency and (ii) take and use or sell any Unit of
Material Rolling Stock.

 

7.5.  Further
Assurances. 
Each Assignor will, at its own expense, make execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
lists,

 

18

 

descriptions and designations of its owned
Units of Material Rolling Stock (including serial numbers and jurisdictions of registration
of each such Unit of Material Rolling Stock), documents of title, schedules,
confirmatory assignments, conveyances, financing statements, transfer endorsements,
powers of attorney, certificates, reports and other assurances or instruments
and take such further steps relating to the Material Rolling Stock constituting
Collateral and other property or rights covered by the security interest hereby
granted, which the Collateral Agent deems reasonably appropriate or advisable
to perfect, preserve or protect its security interest in the Material Rolling
Stock constituting Collateral.

 

ARTICLE VIII

 

PROVISIONS CONCERNING ALL
COLLATERAL

 

8.1.  Protection of Collateral Agent’s
Security.  Each
Assignor will do nothing to impair the rights of the Collateral Agent in the
Collateral. Each Assignor will at all times keep its Inventory and Equipment
insured in favor of the Collateral Agent, at such Assignor’s own expense, to
the extent and in the manner provided in the Bank Credit Agreement. All
policies or certificates with respect to such insurance (and any other
insurance maintained by such Assignor): (i) shall be endorsed to the Collateral
Agent’s satisfaction for the benefit of the Collateral Agent (including,
without limitation, by naming the Collateral Agent as loss payee and naming the
Collateral Agent as an additional insured); (ii) shall state that such
insurance policies shall not be canceled or revised without 30 days’ prior
written notice thereof by the insurer to the Collateral Agent; and (iii) shall
be deposited with the Collateral Agent to the extent, at the times and in the
manner specified in the Bank Credit Agreement. If any Assignor shall fail to
insure its Inventory and Equipment in accordance with the preceding sentence,
or if any Assignor shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Collateral Agent shall have the right
(but shall be under no obligation) to procure such insurance and such Assignor
agrees to promptly reimburse the Collateral Agent for all costs and expenses of
procuring such insurance. Except as otherwise permitted to be retained or
expended by the relevant Assignor pursuant to the terms of the respective
Secured Debt Agreements, the Collateral Agent shall, upon receipt of any
proceeds from insurance maintained by any Assignor, apply such proceeds in accordance
with the terms of the Bank Credit Agreement, or after the Obligations have been
accelerated or otherwise become due and payable, in accordance with Section 9.4
hereof. Each Assignor assumes all liability and responsibility in connection with
the Collateral acquired by it and the liability of such Assignor to pay the Obligations
shall in no way be affected or diminished by reason of the fact that such
Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever
unavailable to such Assignor.

 

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

 

8.3.  Additional
Information. 
Each Assignor will, at its own expense, from time to time upon the
reasonable request of the Collateral Agent, promptly furnish to the Collateral
Agent such information with respect to the Collateral (including the identity
of the Collateral or such

 

19

 

components thereof as may have been requested
by the Collateral Agent, the location of such Collateral, etc.) as may be
requested by the Collateral Agent. Without limiting the forgoing, each Assignor
agrees that it shall promptly furnish to the Collateral Agent such updated
Annexes hereto as may from time to time be reasonably requested by the
Collateral Agent.

 

8.4.  Further
Actions.  Each
Assignor will, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such lists,
descriptions and designations of its Collateral, warehouse receipts, receipts
in the nature of warehouse receipts, bills of lading, documents of title,
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports
and other assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security interest hereby
granted, which the Collateral Agent deems reasonably appropriate or advisable
to perfect, preserve or protect its security interest in the Collateral.

 

8.5.  Financing
Statements. 
Each Assignor hereby irrevocably
authorizes Collateral Agent at any time and from time to time to file in any
filing office in any Uniform Commercial Code jurisdiction any initial financing
statements and amendments thereto that (a) indicate the Collateral (i) as all
assets or all personal property of such Assignor or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the UCC or such jurisdiction, or (ii) as being
of an equal or lesser scope or with greater detail, and (b) contain any other
information required by part 5 of Article 9 of the UCC for the sufficiency or
filing office acceptance of any financing statement or amendment, including (i)
whether such Assignor is an organization, the type of organization and any
organization identification number issued to such Assignor, and (ii) in the
case of a financing statement filed as a fixture filing or indicating
Collateral as as-extracted collateral or timber to be cut, a sufficient
description of real property to which the Collateral relates.  Each Assignor agrees to furnish any such
information to the Collateral Agent promptly upon request.

 

ARTICLE IX

 

REMEDIES UPON OCCURRENCE OF EVENT
OF DEFAULT

 

9.1.  Remedies;
Obtaining the Collateral Upon Default.  Each Assignor agrees that, if any Event of
Default shall have occurred and be continuing, then and in every such case, the
Collateral Agent, in addition to any rights now or hereafter existing under
applicable law and under the other provisions of this Agreement, shall have all
rights as a secured creditor under the UCC in all relevant jurisdictions and
may also:

 

(i)            personally,
or by agents or attorneys, immediately take possession of the Collateral or any
part thereof, from such Assignor 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 such Assignor’s premises where any of the Collateral is located
and remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor;

 

20

 

(ii)           instruct
the obligor or obligors on any agreement, instrument or other obligation
(including, without limitation, the Receivables and the Contracts) constituting
the Collateral to make any payment required by the terms of such agreement,
instrument or other obligation directly to the Collateral Agent and may
exercise any and all remedies of such Assignor in respect of such Collateral;

 

(iii)          withdraw
all monies, securities and instruments in any lockbox account or blocked
account subject to a tri-party agreement pursuant to Section 2.9 of the Bank
Credit Agreement or in any cash collateral account established by Collateral
Agent pursuant to Section 3.3 for application to the Obligations in accordance with
Section 9.4 hereof;

 

(iv)          sell,
assign or otherwise liquidate any or all of the Collateral or any part thereof
in accordance with Section 9.2 hereof, or direct the relevant Assignor to sell,
assign or otherwise liquidate any or all of the Collateral or any part thereof,
and, in each case, take possession of the proceeds of any such sale or
liquidation;

 

(v)           take
possession of the Collateral or any part thereof, by directing the relevant Assignor
in writing to deliver the same to the Collateral Agent at any place or places
designated by the Collateral Agent, in which event such Assignor shall at its
own expense:

 

(x)            forthwith
cause the same to be moved to the place or places so designated by the
Collateral Agent and there delivered to the Collateral Agent;

 

(y)           store
and keep any Collateral so delivered to the Collateral Agent at such place or
places pending further action by the Collateral Agent as provided in Section
9.2 hereof; and

 

(z)            while
the Collateral shall be so stored and kept, provide such guards and maintenance
services as shall be necessary to protect the same and to preserve and maintain
them in good condition;

 

(vi)          license or
sublicense, whether on an exclusive or nonexclusive basis, any Marks, Patents
or Copyrights included in the Collateral for such term and on such conditions
and in such manner as the Collateral Agent shall in its sole judgment
determine;

 

(vii)         apply
any monies constituting Collateral or proceeds thereof in accordance with the
provisions hereof; and

 

(viii)        take
any other action as specified in clauses (2) through (5), inclusive, of Section
9-607(a) of the UCC;

 

it being understood that each Assignor’s obligation so
to deliver the Collateral is of the essence of this Agreement and that, accordingly,
upon application to a court of equity having jurisdiction, the Collateral Agent
shall be entitled to a decree requiring specific performance by such Assignor
of said obligation. By accepting the benefits of this Agreement and each other
Security

 

21

 

Document, the Secured Creditors expressly acknowledge
and agree that this Agreement and each other Security Document may be enforced
only by the action of the Collateral Agent acting upon the instructions of the
Required Secured Creditors and that no other Secured Creditor shall have any
right individually to seek to enforce or to enforce this Agreement or any other
Security Document or to realize upon the security to be granted hereby or
thereby, it being understood and agreed that such rights and remedies may be
exercised by the Collateral Agent for the benefit of the Secured Creditors upon
the terms of this Agreement (including Annex N hereto) and the other
Security Documents. Without limiting the effect of the immediately preceding
sentence or any of the other provisions contained in this Agreement (including
in Annex N hereto), it is understood and agreed that each Secured Creditor
has an absolute and unconditional right to receive payment of all of the respective
Obligations owing by any Assignor to such Secured Creditor pursuant to the
respective Secured Debt Agreements to which such Assignor and Secured Creditor
are a party, when such Obligations become due and payable in accordance with
the terms of such Secured Debt Agreements, and (except for enforcement of the
Security Documents) to institute proceedings for the enforcement of such
payment on or after the date such payment becomes due and payable in accordance
with the terms of the respective Secured Debt Agreements. If any Event of Default shall have occurred
and be continued, each Assignor further agrees, at Collateral Agent’s request,
to assemble the Collateral and make it available to Collateral Agent at a place
or places designated by Collateral Agent which are reasonably convenient to
Collateral Agent and such Assignor, whether at such Assignor’s premises or
elsewhere.  Until Collateral Agent is
able to effect a sale, lease, or other disposition of Collateral, Collateral
Agent shall have the right to hold or use Collateral, or any part thereof, to
the extent that it deems appropriate for the purpose of preserving Collateral
or its value or for any other purpose deemed appropriate by Collateral
Agent.  Collateral Agent shall have no
obligation to any Assignor to maintain or preserve the rights of such Assignor
as against third parties with respect to Collateral while Collateral is in the
possession of Collateral Agent. 
Collateral Agent may, if it so elects, seek the appointment of a
receiver or keeper to take possession of Collateral and to enforce any of
Collateral Agent’s remedies (for the benefit of Collateral Agent and Secured
Creditors), with respect to such appointment without prior notice or hearing as
to such appointment.

 

9.2.  Remedies; Disposition of the Collateral.  Any Collateral repossessed by the Collateral
Agent under or pursuant to Section 9.1 hereof and any other Collateral
whether or not so repossessed by the Collateral Agent, may be sold, assigned,
leased or otherwise disposed of under one or more contracts or as an entirety,
and without the necessity of gathering at the place of sale the property to be
sold, and in general in such manner, at such time or times, at such place or
places and on such terms as the Collateral Agent may, in compliance with any
mandatory requirements of applicable law, determine to be commercially
reasonable. Any of the Collateral may be sold, leased or otherwise disposed of
in the condition in which the same existed when taken by the Collateral Agent
or after any overhaul or repair at the expense of the relevant Assignor which
the Collateral Agent shall determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceedings
permitted by such requirements shall be made upon not less than 10 days’
written notice to the relevant Assignor specifying the time at which such disposition
is to be made and the intended sale price or other

 

22

 

consideration therefor, and shall be subject,
for the 10 days after the giving of such notice, to the right of the relevant Assignor
or any nominee of such Assignor to acquire the Collateral involved at a price
or for such other consideration at least equal to the intended sale price or
other consideration so specified. Any such disposition which shall be a public
sale permitted by such requirements shall be made upon not less than 10 days’
written notice to the relevant Assignor specifying the time and place of such
sale and, in the absence of applicable requirements of law, shall be by public
auction (which may, at the Collateral Agent’s option, be subject to reserve),
after publication of notice of such auction not less than 10 days prior thereto
in two newspapers in general circulation to be selected by the Collateral
Agent. 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 placed fixed for the sale, and such sale may be
made at any time or place to which the sale may be so adjourned. To the extent
permitted by any such requirement of law, the Collateral Agent may bid for and
become the purchaser of the Collateral or any item thereof, offered for sale in
accordance with this Section 9.2 without accountability to the relevant Assignor.
If, under mandatory requirements of applicable law, the Collateral Agent shall
be required to make disposition of the Collateral within a period of time which
does not permit the giving of notice to the relevant Assignor as hereinabove
specified, the Collateral Agent need give such Assignor only such notice of
disposition as shall be reasonably practicable in view of such mandatory
requirements of applicable law. Each Assignor agrees to do or cause to be done
all such other acts and things as may be reasonably necessary to make such sale
or sales of all or any portion of the Collateral of such Assignor valid and
binding and in compliance with any and all applicable laws, regulations,
orders, writs, injunctions, decrees or awards of any and all courts,
arbitrations or governmental instrumentalities, domestic or foreign, having
jurisdiction over any such sale or sales, all at such Assignor’s expense.

 

9.3.  Waiver of
Claims.  Except
as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION
WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S
DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY
SUCH RIGHT WHICH SUCH ASSIGNOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR
ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and such Assignor hereby
further waives, to the extent permitted by law:

 

(i)            all
damages occasioned by such taking of possession except any damages which are
the direct result of the Collateral Agent’s gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision);

 

(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, appraisement, valuation, stay, extension or moratorium
now or hereafter in force under any applicable law in order to prevent or delay
the enforcement of this Agreement the absolute sale of the Collateral or any
portion thereof, and each Assignor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the benefit
of all such laws.

 

23

 

Upon the occurrence of and during the continuance of
an Event of Default, 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 relevant Assignor
therein and thereto, and shall be a perpetual bar both at law and in equity
against such Assignor 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 and under such Assignor.

 

9.4.  Application
of Proceeds.

 

(a)   All moneys
collected by the Collateral Agent (or, to the extent any US Pledge Agreement,
any US Mortgage or any other US Security Document requires proceeds of collateral
under such other US Security Document to be applied in accordance with the
provisions of this Agreement, the Pledgee, Mortgagee or Collateral Agent under
such other US Security Document) upon any sale, collection or other disposition
of the Collateral, together with all other moneys received by the Collateral
Agent hereunder, shall be applied as follows:

 

(i)            first, to
the payment of all amounts owing the Collateral Agent of the type described in
clauses (v), (vi) and (vii) of the definition of Obligations;

 

(ii)           second, to
the extent proceeds remain after the application pursuant to the preceding
clause (i), an amount equal to the outstanding First Lien Primary Obligations
shall be paid to the First Lien Creditors as provided in Section 9.4(e)
hereof, with each First Lien Creditor receiving an amount equal to its
outstanding First Lien Primary Obligations or, if the proceeds are insufficient
to pay in full all such First Lien Primary Obligations, its Pro Rata Share of
the amount remaining to be distributed;

 

(iii)          third,
to the extent proceeds remain after the application pursuant to the preceding
clauses (i) and (ii), an amount equal to the outstanding First Lien Secondary
Obligations shall be paid to the First Lien Creditors as provided in Section
9.4(e) hereof, with each First Lien Creditor receiving an amount equal to
its outstanding First Lien Secondary Obligations or, if the proceeds are
insufficient to pay in full all such First Lien Secondary Obligations, its Pro
Rata Share of the amount remaining to be distributed;

 

(iv)          fourth, to
the extent proceeds remain after the application pursuant to the preceding
clauses (i) through (iii), inclusive, and subject to clause (h) of this Section
9.4, to the payment of all amounts owing the Senior Secured Notes Trustee
in its capacity as such pursuant to the Senior Secured Note Indenture;

 

(v)           fifth, to
the extent proceeds remain after the application pursuant to the preceding
clauses (i) through (iv), inclusive, and subject to clause (h) of this Section
9.4, an amount equal to the outstanding Second Lien Obligations shall be
paid to the Second Lien Creditors as provided in Section 9.4(e) hereof,
with each Second Lien Creditor receiving an amount equal to its outstanding
Second Lien Obligations or, if the proceeds are insufficient to pay in full all
such Second Lien Obligations, its Pro Rata Share of the amount remaining to be
distributed; and

 

24

 

(vi)          sixth, to
the extent proceeds remain after the application pursuant to the preceding
clauses (i) through (v), inclusive, and following the termination of this
Agreement pursuant to Section 12.8(a) hereof, to the relevant Assignor
or to whomever may be lawfully entitled to receive such surplus.

 

(b)   For purposes of
this Agreement, “Pro Rata Share” shall mean, when calculating a Secured
Creditor’s portion of any distribution or amount, that amount (expressed as a
percentage) equal to a fraction (i) the numerator of which is (x) in the case
of the First Lien Creditors, the then unpaid amount of each such First Lien
Creditor’s First Lien Primary Obligations or First Lien Secondary Obligations,
as the case may be, and (y) in the case of the Second Lien Creditors, the then
unpaid amount of each such Second Lien Creditor’s Second Lien Obligations, and
(ii) the denominator of which is (x) in the case of the First Lien Creditors,
the then outstanding amount of all First Lien Primary Obligations or First Lien
Secondary Obligations, as the case may be, and (y) in the case of the Second
Lien Creditors, the then outstanding amount of all Second Lien Obligations.

 

(c)   When payments to
the First Lien Creditors are based upon their respective Pro Rata Shares, the
amounts received by such First Lien Creditors hereunder shall be applied (for
purposes of making determinations under this Section 9.4 only) (i)
first, to their First Lien Primary Obligations and (ii) second, to their First
Lien Secondary Obligations. If any payment to any First Lien Creditor of its
Pro Rata Share of any distribution made pursuant to the provisions of Section
9.4(a) hereof would result in overpayment to such First Lien Creditor, such
excess amount shall instead be distributed in respect of the unpaid First Lien
Primary Obligations or First Lien Secondary Obligations, as the case may be, of
the other First Lien Creditors, with each First Lien Creditor whose First Lien
Primary Obligations or First Lien Secondary Obligations, as the case may be,
have not been paid in full to receive an amount equal to such excess amount
multiplied by a fraction the numerator of which is the unpaid First Lien
Primary Obligations or First Lien Secondary Obligations, as the case may be, of
such First Lien Creditor and the denominator of which is the unpaid First Lien
Primary Obligations or First Lien Secondary Obligations, as the case may be, of
all First Lien Creditors entitled to such distribution.

 

(d)   Each of the
Secured Creditors, by their acceptance of the benefits hereof and of the other
applicable Security Documents, agrees and acknowledges that if the Bank Lender
Creditors are to receive a distribution on account of undrawn amounts with
respect to US Letters of Credit issued (or deemed issued) under the Bank Credit
Agreement (which shall only occur after all outstanding US Loans and unreimbursed
Letter of Credit Obligations with respect to such US Letters of Credit have
been paid in full), such amounts shall be paid to the Agent under the Bank Credit
Agreement and held by it, for the equal and ratable benefit of the Bank Lender Creditors,
as cash security for the repayment of Obligations owing to the Bank Lender Creditors
as such. If any amounts are held as cash security pursuant to the immediately
preceding sentence, then upon the termination of all outstanding US Letters of
Credit, and after the application of all such cash security to the repayment of
all Obligations owing to the Bank Lender Creditors after giving effect to the
termination of all such US Letters of Credit, if there remains any excess cash,
such excess cash shall be returned by the US Agent to the Collateral Agent for
distribution in accordance with Section 9.4(a) hereof.

 

25

 

(e)   Except as set
forth in Section 9.4(d) hereof, all payments required to be made hereunder
shall be made (v) if to the Bank Lender Creditors, to the US Agent under the
Bank Credit Agreement for the account of the Bank Lender Creditors, (w) if to
the Note Lender Creditors, to the Additional Senior Secured Notes Trustee, (x)
if to the Other Creditors, to the trustee, paying agent or other similar representative
(each a “Representative”) for the
Other Creditors or, in the absence of such a Representative, directly to the
Other Creditors, and (y) if
to the Second Lien Creditors, to the Senior Secured Notes Trustee; provided, however, except for payments to be made to the
Collateral Agent for application as provided in Section 9.4(a)(i) hereof
and for payments to be made from (or with Proceeds from) the Additional Senior
Secured Notes Excluded Collateral (which payments shall be made as provided in
this Agreement without giving effect to this proviso), all other payments hereunder
to be made to the First Lien Creditors shall be made to the Collateral Agent
for distribution among the First Lien Creditors in accordance with the terms of
the Amended and Restated Intercreditor Agreement.

 

(f)    For purposes of
applying payments received in accordance with this Section 9.4, the
Collateral Agent shall be entitled to rely upon (i) the US Agent under the Bank
Credit Agreement, (ii) the Additional Senior Secured Notes Trustee under the
Note Credit Agreement, (iii) the Representative for the Other Creditors or, in
the absence of such a Representative, upon the Other Creditors and (iv) the
Senior Secured Notes Trustee, in each case, for a determination (which the US Agent,
the Additional Senior Secured Notes Trustee, each Representative for any Other
Creditors, the Senior Secured Notes Trustee and the Secured Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Obligations (and type of Obligations) owed to the Bank Lender Creditors, the
Note Lender Creditors, the Other Creditors or the Second Lien Creditors, as the
case may be. Unless it has actual knowledge (including by way of written notice
from a Lender Creditor or an Other Creditor) to the contrary, the US Agent, the
Additional Senior Secured Notes Trustee and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no First Lien Secondary
Obligations are outstanding. Unless it has actual knowledge (including by way
of written notice from an Other Creditor) to the contrary, the Collateral
Agent, in acting hereunder, shall be entitled to assume that no US Hedge
Agreements are in existence.

 

(g)   It is understood
and agreed that each of the Assignors shall remain liable for its Obligations
to the extent of any deficiency between the amount of the proceeds of the Collateral
hereunder and the aggregate amount of the sums referred to in clause (a) of
this Section with respect to the relevant Assignor.

 

(h)   Notwithstanding
anything to the contrary contained in this Agreement or in any other Security
Document, (i) the Second Lien Creditors, by accepting the benefits of this
Agreement and the US Pledge Agreement, hereby expressly acknowledge and agree
that they shall not be entitled to receive any application pursuant to Section
9.4(a) hereof in respect of any Second Lien Excluded Collateral, and (ii)
the Note Lender Creditors, by accepting the benefits of this Agreement and the
US Pledge Agreement, hereby expressly agree that they shall not be entitled to
receive any application pursuant to Section 9.4(a) hereof or the Amended
and Restated Intercreditor Agreement in respect of any Additional Senior Secured
Notes Excluded Collateral.

 

26

 

9.5.  Remedies
Cumulative. 
Each and every right, power and remedy hereby specifically given to the
Collateral Agent shall be in addition to every other right, power and remedy
specifically given under this Agreement, the other Secured Debt Agreements now
or hereafter existing at law, in equity or by statute and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time or simultaneously and as often and in such order as
may be deemed expedient by the Collateral Agent. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of the exercise
of one shall not be deemed a waiver of the right to exercise any other or
others. No delay or omission of the Collateral Agent in the exercise of any
such right, power or remedy and no renewal or extension of any of the
Obligations shall impair any such right, power or remedy or shall be construed
to be a waiver of any Default or Event of Default or an acquiescence therein.
No notice to or demand on any Assignor in any case shall entitle it to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Collateral Agent to any other or further
action in any circumstances without notice or demand. In the event that the
Collateral Agent shall bring any suit to enforce any of its rights hereunder and
shall be entitled to judgment, then in such suit the Collateral Agent may recover
expenses, including attorneys’ fees, and the amounts thereof shall be included
in such judgment.

 

9.6.  Discontinuance
of Proceedings. 
In case the Collateral Agent shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement or under any other
Security 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
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement and under the other Security Documents, and all rights, remedies
and powers of the Collateral Agent shall continue as if no such proceeding had
been instituted.

 

ARTICLE X

 

INDEMNITY

 

10.1.  Indemnity.  (a) Each Assignor jointly and severally
agrees to indemnify, reimburse and hold the Collateral Agent, each other
Secured Creditor that is an indemnitor under Section 6 of Annex N hereto
and their respective successors, permitted assigns, employees, officers,
directors, affiliates, agents and servants (hereinafter in this Section 10.1
referred to individually as an “Indemnitee,”
and, collectively, as “Indemnitees”)
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including attorneys’ fees and expenses) (for the
purposes of this Section 10.1 the foregoing are collectively called “expenses”)
of whatsoever kind and nature imposed on, asserted against or incurred by any
of the Indemnitees in any way relating to or arising out of this Agreement, any
other Secured Debt Agreement or any other document executed in connection herewith
or therewith or in any other way connected with the administration of the transactions
contemplated hereby or thereby or the enforcement of any of the terms of, or
the preservation of any rights under any thereof, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance,

 

27

 

lease, financing, possession, operation, condition,
sale, return or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable), the
violation of the laws of any country, state or other governmental body or unit,
any tort (including, without limitation, claims arising or imposed under the
doctrine of strict liability, or for or on account of injury to or the death of
any Person (including any Indemnitee), or property damage), or contract claim;
provided that no Indemnitee shall be indemnified pursuant to this Section
10.1(a) for losses, damages or liabilities to the extent caused by the
gross negligence or willful misconduct of such Indemnitee (as determined by a
court of competent jurisdiction in a final and non-appealable decision). Each Assignor
agrees that upon written notice by any Indemnitee of the assertion of such a
liability, obligation, damage, injury, penalty, claim, demand, action, suit or
judgment, the relevant Assignor shall assume full responsibility for the defense
thereof. Each Indemnitee agrees to use its best efforts to promptly notify the
relevant Assignor of any such assertion of which such Indemnitee has knowledge.

 

(a)   Without limiting
the application of Section 10.1(a) hereof, each Assignor agrees, jointly
and severally, to pay, or reimburse the Collateral Agent for any and all fees,
costs and expenses of whatever kind or nature incurred in connection with the
creation, preservation or protection of the Collateral Agent’s Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral, premiums for insurance with respect to the
Collateral and all other fees, costs and expenses in connection with
protecting, maintaining or preserving the Collateral and the Collateral Agent’s
interest therein, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions, suits or proceedings arising out of or
relating to the Collateral.

 

(b)   Without limiting
the application of Section 10.1(a) or (b) hereof, each Assignor agrees,
jointly and severally, to pay, indemnify and hold each Indemnitee harmless from
and against any loss, costs, damages and expenses which such Indemnitee may
suffer, expend or incur in consequence of or growing out of any
misrepresentation by any Assignor in this Agreement, any other Secured Debt
Agreement or in any writing contemplated by or made or delivered pursuant to or
in connection with this Agreement or any other Secured Debt Agreement.

 

(c)   If and to the
extent that the obligations of any Assignor under this Section 10.1 are
unenforceable for any reason, such Assignor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.

 

10.2.  Indemnity Obligations Secured by Collateral;
Survival.  Any amounts
paid by any Indemnitee as to which such Indemnitee has the right to reimbursement
shall constitute Obligations secured by the Collateral. The indemnity
obligations of each Assignor contained in this Article X shall continue in full
force and effect notwithstanding the full payment of all the Notes issued and
the US Loans made under the Bank Credit Agreement, the termination of all US Letters
of Credit issued under the Bank Credit Agreement, the termination of all US
Hedge Agreements entered into with the Other Creditors, the full repayment of
all of the outstanding

 

28

 

Senior Secured Notes and Additional Senior
Secured Notes and the payment of all other Obligations and notwithstanding the discharge
thereof.

 

ARTICLE XI

 

DEFINITIONS

 

The following terms shall have the meanings herein
specified. Such definitions shall be equally applicable to the singular and
plural forms of the terms defined.

 

“Account Debtor”
shall mean “account debtor” as such term is defined in the Uniform Commercial
Code as in effect on the Second
Restatement Effective Date in the State of New York.

 

“Additional Senior Secured Noteholders”
shall have the meaning provided in the recitals to this Agreement.

 

“Additional Senior Secured Notes”
shall have the meaning provided in the recitals to this
Agreement.

 

“Additional Senior Secured
Notes Excluded Collateral” shall mean and include (i) any
property or assets owned by (x) Holdings, (y) any Subsidiary of Holdings that
is not also a Subsidiary of RPP USA, or (z) any Foreign Subsidiary of RPP USA,
(ii) any Real Property and Real Property leases (domestic or foreign), (iii)
all capital stock or other securities of any Assignor that is a Subsidiary of
RPP USA to the extent the Applicable Value of such capital stock or other
securities is equal to or greater than 20% of the then aggregate principal
amount of the Additional Senior Secured Notes outstanding and (iv) all proceeds
and products from any and all of the foregoing excluded Collateral described in
preceding clauses (i) through (iii), unless such proceeds or products would
otherwise constitute Collateral without regard to preceding clauses (i) through
(iii); provided however, in the event that Rule
3-10 or Rule 3-16 of Regulation S-X under the Securities Act is amended,
modified or interpreted by the SEC to require (or is replaced with another rule
or regulation, or any other law, rule or regulation is adopted, which would
require) the filing with the SEC (or any other governmental agency) of separate
financial statements of any Assignor that is a Subsidiary of RPP USA due to the
fact that such Assignor’s capital stock or other securities secure the Additional
Senior Secured Notes, then the capital stock or other securities of such Assignor
shall automatically be deemed not to be part of the Collateral in which the
Note Lender Creditors have a security interest and shall automatically be
deemed to be part of the Additional Senior Secured Notes Excluded Collateral
but only to the extent necessary to not be subjected to such requirement. In
such event, the applicable Security Documents shall be deemed to be amended or
modified to include as Additional Senior Secured Notes Excluded Collateral the
shares of capital stock or other securities that are so deemed to no longer
constitute part of the Collateral.

 

“Additional Senior Secured
Notes Trustee” shall have the meaning provided in the recitals
to this Agreement.

 

29

 

“Agreement”
shall mean this Second Amended and Restated US Security Agreement, as the same
may be further modified, supplemented or amended from time to time in
accordance with its terms.

 

“Amended
and Restated  Intercreditor Agreement” shall mean the Intercreditor
Agreement, dated as of December 22, 2003, among the Additional Senior Secured
Notes Trustee, the Original
Agent, the Original Collateral
Agent and the Overdraft Creditors (as
defined therein), and acknowledged and agreed to by the Credit Parties
from time to time party thereto, as amended and restated, as of the Second
Restatement Effective Date, by and among the Collateral Agent and the Credit
Parties, as further amended, modified, restated, supplemented or replaced from
time to time in accordance with the terms thereof, including, without
limitation, any intercreditor or similar agreement with respect to any
refinancing, replacement or restructuring (including, without limitation, any
such agreement increasing the amount of indebtedness referred to therein or
adding additional parties thereto) with respect to all or any portion of the
indebtedness referenced in such agreement.

 

“Applicable Value”
shall mean that aggregate principal amount, par value, book value as carried by
RPP USA or the market value, whichever is greater, of any capital stock or
other securities of any Assignor that is a Subsidiary of RPP USA.

 

“Assignor”
shall have the meaning provided in the preamble to this Agreement.

 

“Bank Credit Agreement”
shall have the meaning provided in the recitals to this Agreement.

 

“Bank Credit Document
Obligations” shall have the meaning provided in the definition
of “Obligations” in this Article XI.

 

“Bank Lender Creditors”
shall have the meaning provided in the recitals to this Agreement.

 

“Chattel Paper”
shall have the meaning provided in the Uniform Commercial Code as in effect on the
Second Restatement Effective Date in the State of New York.

 

“Class”
shall have the meaning provided in Section 12.2 of this Agreement.

 

“Collateral”
shall have the meaning provided in Section 1.1(a) of this Agreement.

 

“Collateral Agent”
shall have the meaning provided in the preamble to this Agreement.

 

“Commercial Tort Claims”
shall mean “commercial tort claims” as such term is defined in the Uniform
Commercial Code as in effect on the Second Restatement Effective Date in the
State of New York.

 

“Contract Rights”
shall mean all rights of any Assignor under each Contract, including, without
limitation, (i) any and all rights to receive and demand payments under any or
all Contracts, (ii) any and all rights to receive and compel performance under
any and all Contracts

 

30

 

and (iii) any and all other rights, interests and
claims now existing or in the future arising in connection with any and all
Contracts.

 

“Contracts”
shall mean all contracts between any Assignor and one or more additional
parties (including, without limitation, any US Hedge Agreements, licensing
agreements and any partnership agreements, joint venture agreements and limited
liability company agreements).

 

“Copyrights”
shall mean any United States or foreign copyright owned by any Assignor,
including any registrations of any Copyrights, in the United States Copyright
Office or the equivalent thereof in any foreign country, as well as any
application for a United States or foreign copyright registration now or
hereafter made with the United States Copyright Office or the equivalent thereof
in any foreign jurisdiction by any Assignor.

 

“Credit Agreement”
shall have the meaning provided in the recitals to this Agreement.

 

“Credit Document
Obligations” shall have the meaning provided in the definition
of “Obligations” in this Article XI.

 

“Default” shall
mean any event that, with the passage of time or notice or both, would, unless
cured or waived, become an Event of Default.

 

“Deposit Accounts”
shall mean all “deposit accounts” as such term is defined in the UCC as in
effect on the Second Restatement Effective Date in the State of New York.

 

“Documents”
shall have the meaning provided in the Uniform Commercial Code as in effect on the
Second Restatement Effective Date in the State of New York.

 

“Domain Names”
shall mean all Internet domain names and associated URL addresses in or to
which any Assignor now or hereafter has any right, title or interest.

 

“Electronic Chattel Paper”
shall mean “electronic chattel paper” as such term is defined in the Uniform Commercial
Code as in effect on the Second Restatement Effective Date in the State of New
York.

 

“Equipment”
shall mean any “equipment,” as such term is defined in the Uniform Commercial
Code as in effect on the Second Restatement Effective Date in the State of New York,
now or hereafter owned by any Assignor and, in any event, shall include, but
shall not be limited to, all Rolling Stock, all Tractor Trailers, all machinery,
equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor
and any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto, but excluding
Equipment to the extent it is subject to a Permitted Encumbrance under clause (d),
(j), (l) or (m) of definition of “Permitted Encumbrance” in the Bank Credit
Agreement and the terms of the Indebtedness securing such Permitted Encumbrance
prohibits assignment of, or granting of a security interest in, such Assignor’s
rights and interests therein.

 

“Event of Default”
shall mean any Event of Default (or similar term) under, and as defined in, the
Credit Agreement or any Hedge Agreement entered into with an Other Creditor

 

31

 

and shall in any event include, without limitation,
(i) any payment default under any Hedge Agreement or any Senior Secured Note
Document, and (ii) at any time after the First Lien Obligations have been paid
in full and all Commitments and US Letters of Credit under the Bank Credit
Agreement have been terminated, any “Event of Default” (or similar term) under,
and as defined in, any Senior Secured Note Document.

 

“First Lien Creditors”
shall have the meaning provided in the recitals to this Agreement.

 

“First Lien Obligations”
shall mean all Credit Document Obligations and Other Obligations.

 

“First Lien Primary
Obligations” shall mean (i) in the case of the Credit Document
Obligations, all principal of, premium (if any), and interest on, all US Loans
and (for the avoidance of doubt) notes (including Additional Senior Secured
Notes) under the Credit Agreement, all unreimbursed Letter of Credit
Obligations, the contingent obligation to reimburse all drawings that may occur
with respect to outstanding US Letters of Credit under the Bank Credit
Agreement and all fees owing pursuant to the Credit Agreement, and (ii) in the
case of Other Obligations, all amounts due under any US Hedge Agreements (other
than indemnities, fees (including, without limitation, attorneys’ fees) and
similar obligations and liabilities).

 

“First Lien Secondary
Obligations” shall mean all First Lien Obligations other than
First Lien Primary Obligations.

 

“General Intangibles”
shall have the meaning provided in the Uniform Commercial Code as in effect on the Second Restatement Effective Date
in the State of New York.

 

“Goods”
shall have the meaning provided in the Uniform Commercial Code as in effect on the Second Restatement Effective Date
in the State of New York.

 

“Health-Care Insurance
Receivable” shall mean any “health-care insurance receivable” as
such term is defined in the UCC as in effect on the Second Restatement Effective Date in the State of New York.

 

“Holdings”
shall have the meaning provided in the recitals to this Agreement.

 

“Indemnitee”
shall have the meaning provided in Section 10.1 of this Agreement.

 

“Instrument”
shall have the meaning provided in the Uniform Commercial Code as in effect on the Second Restatement Effective Date in
the State of New York.

 

“Inventory”
shall mean merchandise, inventory and goods, and all additions, substitutions
and replacements thereof and all accessions thereto, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production — from raw materials through
work-in-process to finished goods — and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor’s
customers, and shall specifically include all “inventory” as such term is
defined in the Uniform Commercial Code as

 

32

 

in effect on the
Second Restatement Effective Date in the State of New York, now or
hereafter owned by any Assignor.

 

“Investment Property”
shall mean “investment property” as such term is defined in the Uniform
Commercial Code as in effect on the
Second Restatement Effective Date in the State of New York.

 

“Leasehold”
of any Person shall mean all of the right, title and interest of such Person as
lessee or licensee in, to and under leases or licenses of land, improvements
and/or fixtures.

 

“Lender Creditors”
shall have the meaning provided in the recitals to this Agreement.

 

“Lenders”
shall have the meaning provided in the recitals to this Agreement.

 

“Letter-of-Credit Rights”
shall mean “letter-of-credit rights” as such term is defined in the Uniform
Commercial Code as in effect on the
Second Restatement Effective Date in the State of New York.

 

“Liens”
shall mean any security interest, mortgage, pledge, lien, claim, charge,
encumbrance, title retention agreement, lessor’s interest in a financing lease
or analogous instrument, in, of, or on any Assignor’s property.

 

“Location”
of any Assignor, shall mean such Assignor’s “location” as determined pursuant
to Section 9-307 of the UCC.

 

“Marks”
shall mean all right, title and interest in and to any United States or foreign
trademarks, service marks and trade names now held or hereafter acquired by any
Assignor, including any registration or application for registration of any
trademarks and service marks in the United States Patent and Trademark Office,
or the equivalent thereof in any State of the United States or in any foreign
country, and any trade dress including logos, designs, trade names, company
names, business names, fictitious business names and other business identifiers
in connection with which any of these registered or unregistered marks are
used.

 

“Material Rolling Stock”
shall mean any Unit of Rolling Stock having a net book value greater than
$100,000.

 

“Material Tractor Trailer”
shall mean any individual Tractor Trailer having a net book value greater than
$100,000.

 

“Mortgage”
shall mean a mortgage, leasehold mortgage, deed of trust, leasehold deed of
trust, deed to secure debt, leasehold deed to secure debt or similar security
instrument.

 

“Netherlands Borrowers”
shall have the meaning provided in the recital to this Agreement.

 

“Note Credit Agreement”
shall have the meaning provided in the recitals to this Agreement.

 

33

 

“Note Credit Documents”
shall have the meaning provided in the recitals to this Agreement.

 

“Note Lender Creditors”
shall have the meaning provided in the recitals to this Agreement.

 

“Obligations”
shall mean for each Assignor:

 

(i)            the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations, indebtedness and liabilities (including, without
limitation, indemnities, fees and interest thereon (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Assignor at the rate provided for
in the respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding)) owing by such Assignor to the
Lender Creditors, whether now existing or hereafter incurred under, arising out
of, or in connection with the Credit Agreement and the other Loan Documents
(which term Loan Documents, for purposes of this clause (i) only, for the
avoidance of doubt, also includes all Note Credit Documents) to which such
Assignor is a party (including all such obligations, liabilities and
indebtedness of such Assignor under any guaranty to which such assignor is a
party constituting a Loan Document) and the due performance and compliance by
each Assignor with all of the terms, conditions and agreements contained in the
Credit Agreement and in such other Loan Documents to which such assignor is a
party (all such obligations, indebtedness and liabilities under this clause
(i), except to the extent consisting of Other Obligations, being herein
collectively called the “Credit Document
Obligations”, and all such obligations, indebtedness, and
liabilities under this clause (i), except to the extent consisting of Other
Obligations or obligations, indebtedness or liabilities with respect to the
Note Credit Documents, being herein collectively called the “Bank Credit Document Obligations”).

 

(ii)           the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations, indebtedness and liabilities (including, without
limitation, indemnities, fees and interest thereon (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Assignor at the rate provided for
in the respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding)) owing by such Assignor to the
Other Creditors under, or with respect to (including all such obligations, indebtedness
and liabilities of such Assignor under any guaranty of), any Hedge Agreement, whether
such Hedge Agreement is now in existence or hereafter arising, and the due performance
and compliance by such Assignor with all of the terms, conditions and
agreements contained therein (all such obligations, liabilities and
indebtedness under this clause (ii) being herein collectively called the “Other Obligations”);

 

(iii)          Intentionally
Omitted.

 

34

 

(iv)          the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, indemnities, fees and interest thereon (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency, reorganization
or similar proceeding of any Assignor at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed in
any such proceeding)) of such Assignor owing to the Second Lien Creditors,
whether now existing or hereafter incurred under, arising out of, or in
connection with the Senior Secured Notes and the other Senior Secured Note
Documents to which such Assignor is a party (including all such obligations,
indebtedness and liabilities of such Assignor under any guaranty constituting a
Senior Secured Note Document) and the due performance and compliance by such Assignor
with all of the terms, conditions and agreements contained in the Senior Secured
Notes and in such other Senior Secured Note Documents (all such obligations,
liabilities and indebtedness under this clause (iv) being herein collectively
called the “Second Lien Obligations”);

 

(v)           any and
all sums owing at any time owing to Collateral Agent, including without
limitation, any and all sums advanced by the Collateral Agent in order to
preserve the Collateral or preserve its security interest in the Collateral;

 

(vi)          in the
event of any proceeding for the collection or enforcement of any indebtedness,
obligations or liabilities of any Assignor referred to in clauses (i) through
(iv) above, after an Event of Default shall have occurred and be continuing,
the reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, or of any
exercise by the Collateral Agent of its rights hereunder, together with
reasonable attorneys’ fees and court costs; and

 

(vii)         all
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 10.1 of this Agreement;

 

it being acknowledged and agreed that the “Obligations”
shall include extensions of credit of the types described above, whether
outstanding on the date of this Agreement or extended from time to time after
the date of this Agreement.

 

“Original
Agent” shall have the meaning provided in the recitals to this
Agreement.

 

“Original
Bank Credit Agreement” shall have the meaning provided in the
recitals to this Agreement.

 

“Original
Bank Lender Creditors” shall have the meaning provided in the
recitals to this Agreement.

 

“Original
Collateral Agent” shall have the meaning provided in the
recitals to this Agreement.

 

“Original Dutch Borrower”
shall have the meaning provided in the recitals to this Agreement.

 

35

 

“Original
Lenders” shall have the meaning provided in the recitals to this
Agreement.

 

“Original US Security
Agreement” shall have the meaning provided in the recitals to
this Agreement.

 

“Other Creditors”
shall have the meaning provided in the recitals to this Agreement.

 

“Other Obligations”
shall have the meaning provided in the definition of “Obligations” in this
Article XI.

 

“Patents”
shall mean any United States or foreign patent to which any Assignor now or
hereafter has right, title and interest therein, and any divisions or
continuation (including, but not limited to, continuations in parts) and
improvements thereof, as well as any application for a United States or foreign
patent now or hereafter made by any Assignor.

 

“Permitted Liens”
shall mean (i) “Permitted Encumbrances” under, and as defined in, the Bank Credit
Agreement, (ii) Liens otherwise permitted under the Credit Agreement or (iii)
after the date on which all First Lien Obligations have been paid in full in
cash in accordance with the terms thereof and all Commitments and US Letters of
Credit under the Bank Credit Agreement have been terminated, those Liens
permitted at such time under the Senior Secured Note Indenture.

 

“Permits”
shall mean, to the extent permitted to be assigned by the terms thereof or by
applicable law, all licenses, permits, rights, orders, variances, franchises or
authorizations (including certificates of need) of or from any governmental
authority or agency.

 

“Pro Rata Share”
shall have the meaning provided in Section 9.4(b) of this Agreement.

 

“Proceeds”
shall mean all “proceeds” as such term is defined in the Uniform Commercial
Code as in effect in the State of New York on the Second Restatement Effective Date or under other relevant law
and, in any event, shall include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Collateral Agent or any Assignor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to any Assignor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of governmental
authority) and (iii) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.

 

“Real Property”
of any Person shall mean all of the right, title and interest of such Person in
and to land, immovable property, improvements and fixtures, including
Leaseholds.

 

“Receivables”
shall mean any “account” as such term is defined in the Uniform Commercial Code
as in effect on the Second Restatement
Effective Date in the State of New York, and in any event shall include
but shall not be limited to, all rights to payment of any monetary obligation,
whether or not earned by performance, (i) for property that has been or is to
be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services
rendered or to be rendered, (iii) for a policy of insurance issued or to be
issued, (iv) for a secondary obligation

 

36

 

incurred or to be incurred, (v) for energy provided or
to be provided, (vi) for the use or hire of a vessel under a charter or other
contract, (vii) arising out of the use of a credit or charge card or
information contained on or for use with the card, or (viii) as winnings in a
lottery or other game of chance operated or sponsored by a State, governmental
unit of a State, or person licensed or authorized to operate the game by a
State or governmental unit of a State. Without limiting the foregoing, the term
“account” shall include all Health-Care-Insurance Receivables.

 

“Registered Organization”
shall have the meaning provided in the Uniform Commercial Code as in effect in
the State of New York on the Second Restatement Effective Date or as thereafter
amended.

 

“Representative”
shall have the meaning provided in Section 9.4(e) of this Agreement.

 

“Required Second Lien
Creditors” shall mean the holders of a majority of the then
outstanding principal amount of all Senior Secured Notes.

 

“Required Secured Creditors”
shall mean (i) at any time when any Bank Credit Document Obligations are
outstanding or any Commitments or US Letters of Credit under the Bank Credit
Agreement exist, the Requisite Lender Creditors, (ii) at any time after all of
the Bank Credit Document Obligations have been paid in full in cash in
accordance with the terms thereof and all Commitments and US Letters of Credit
under the Bank Credit Agreement have been terminated, the holders of a majority
of the Other Obligations, and (iii) at any time after all First Lien Obligations have been paid
in full in cash in accordance with the terms thereof and all Commitments and US
Letters of Credit under the Bank Credit Agreement have been terminated, the Senior
Secured Notes Trustee acting at the direction of the Required Second Lien Creditors  (it being understood that, for purposes of
clauses (i) and (ii) above, such clauses shall be subject to the terms of the Intercreditor
Agreement).

 

“Requisite Creditors”
shall have the meaning provided in Section 12.2 of this Agreement.

 

“Requisite Lender Creditors”
shall mean (i) the “Requisite Lenders” under, and as defined in, the Bank
Credit Agreement (or, to the extent provided in Section 9.2 of the Bank Credit
Agreement, each of the Lenders) and (ii) subject to the terms of the
Intercreditor Agreement, the Additional Senior Secured Notes Trustee acting at
the direction of the holders of a majority of the then outstanding principal
amount of all Additional Senior Secured Notes.

 

“Rolling Stock”
shall mean any railroad car, locomotive, stacktrain or other rolling stock, or
accessories used on such railroad cars, locomotives or other rolling stock
(including superstructures and racks).

 

“RPP USA”
shall have the meaning provided in the recitals to this Agreement.

 

“Second Lien Creditors”
shall have the meaning provided in the recitals to this Agreement.

 

“Second Lien Excluded
Collateral” shall mean and include (i) any property or assets
owned by (x) Holdings, (y) any Subsidiary of Holdings that is not also a
Subsidiary of RPP

 

37

 

USA, or (z) any Foreign Subsidiary of RPP USA, (ii) any
Real Property and Real Property leases (domestic or foreign), (iii) all capital
stock or other securities of any Assignor that is a Subsidiary of RPP USA to
the extent the Applicable Value of such capital stock or other securities is
equal to or greater than 20% of the then aggregate principal amount of the Senior
Secured Notes outstanding and (iv) all proceeds and products from any and all
of the foregoing excluded Collateral described in clauses (i) through (iii), unless
such proceeds or products would otherwise constitute Collateral without regard
to preceding clauses (i) through (iii); provided however, in the event that
Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act is amended,
modified or interpreted by the SEC to require (or is replaced with another rule
or regulation, or any other law, rule or regulation is adopted, which would
require) the filing with the SEC (or any other governmental agency) of separate
financial statements of any Assignor that is a Subsidiary of RPP USA due to the
fact that such Assignor’s capital stock or other securities secure the Senior
Secured Notes, then the capital stock or other securities of such Assignor
shall automatically be deemed not to be part of the Collateral for which the
Second Lien Creditors have a security interest in and shall automatically be
deemed to be part of the Second Lien Excluded Collateral but only to the extent
necessary to not be subject to such requirement. In such event, the applicable
Security Documents shall be deemed to be amended or modified to include as
Second Lien Excluded Collateral the shares of capital stock or other securities
that are so deemed to no longer constitute part of the Collateral.

 

“Second Lien Obligations”
shall have the meaning provided in the definition of “Obligations” in this
Article XI.

 

“Second Restatement
Effective Date” shall mean the date and time on or prior to
January 24, 2005 (a) on which (i) this Agreement shall have been executed and
delivered by the Collateral Agent and each US Credit Party for whom a signature
line has been provided below and bearing the consent of the Required Secured
Creditors, (ii) the initial advance under the Bank Credit Agreement shall have
been made and all Obligations arising under the Original Bank Agreement, and
all Other Obligations (each as defined in the Original Security Agreement)
shall have been satisfied in full and (iii) the Resignation shall have been
executed by the Original Collateral Agent and delivered to RPP USA, the Additional
Senior Secured Notes Trustee and the Senior Secured Notes Trustee and (b) of
which written notice of the events described in clause (a) of this definition
shall have been provided by the Collateral Agent to RPP USA, the Senior Secured
Notes Trustee and the Additional Senior Secured Notes Trustee..

 

“Secured Creditors”
shall have the meaning provided in the recitals to this Agreement.

 

“Secured Debt Agreements”
shall mean and include this Agreement, the other Loan Documents to which any
Assignor is a party (which term Loan Documents, for purposes of this definition
only, also shall include all Note Credit Documents), the US Hedge Agreements
entered into with an Other Creditor and the Senior Secured Note Documents.

 

“Senior Secured Note
Documents” shall have the meaning provided in the recitals to
this Agreement.

 

“Senior Secured Note
Indenture” shall have the meaning provided in the recitals to
this Agreement.

 

38

 

“Senior Secured Noteholders”
shall have the meaning provided in the recitals to this Agreement.

 

“Senior Secured Notes”
shall have the meaning provided in the recitals to this Agreement.

 

“Senior Secured Notes
Trustee” shall have the meaning provided in the preamble to this
Agreement.

 

“Security Documents”
shall mean collectively, the “Collateral Documents” (as such term is defined in
the Bank Credit Agreement), all Control Agreements, landlord waivers, mortgagee
waivers, bailee waivers and similar agreements entered into by the Collateral
Agent in connection with any Collateral.

 

“Software”
shall mean “software” as such term is defined in the Uniform Commercial Code as
in effect on the Second Restatement Effective Date in the State of New York.

 

“STB” shall
mean the Surface Transportation Board or any successor thereto.

 

“Supporting Obligations”
shall mean any “supporting obligation” as such term is defined in the Uniform
Commercial Code as in effect on the Second Restatement Effective Date in the
State of New York, now or hereafter owned by any Assignor, or in which any Assignor
has any rights, and, in any event, shall include, but shall not be limited to
all of such Assignor’s rights in any Letter-of-Credit Right or secondary
obligation that supports the payment or performance of, and all security for,
any Receivable, Chattel Paper, Document, General Intangible, Instrument or
Investment Property.

 

“Tangible Chattel Paper”
shall mean “tangible chattel paper” as such term is defined in the Uniform
Commercial Code as in effect on the Second Restatement Effective Date in the
State of New York.

 

“Termination Date”
shall have the meaning provided in Section 12.8 of this Agreement.

 

“Tractor Trailer”
shall mean any vehicle, truck, tractor, trailer, tank trailer or other trailer
or similar vehicle or trailer.

 

“Trade Secret Rights”
shall have the meaning provided in Section 5.1 of this Agreement.

 

“Transmitting Utility”
shall have the meaning given such term in Section 9-102(a)(80) of the UCC.

 

“UCC” shall
mean the Uniform Commercial Code as in effect from time to time in the relevant
jurisdiction.

 

“Unit” shall
mean any individual unit of Rolling Stock.

 

“US Agent”
shall have the meaning provided in the recitals to this Agreement.

 

39

 

“US Borrower”
and “US Borrowers” shall have the
respective meaning provided to them in the recitals to this Agreement.

 

“US Finance Corp.”
shall have the meaning provided in the recitals to this Agreement.

 

“US Lenders”
shall have the meaning provided in the recitals to this Agreement.

 

“US Loans”
shall have the meaning provided in the recitals to this Agreement.

 

“US Mortgage”
shall mean any Mortgage executed by a US Credit Party.

 

“US Security Document”
shall mean each US Pledge Agreement, each Mortgage, this Agreement and each other
Security Document executed by a US Credit Party.

 

ARTICLE XII

 

MISCELLANEOUS

 

12.1.  Notices.  Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed:

 

(a)   if to any Assignor,
at:

 

1600 Smith Street, 24th Floor

Houston, TX 77002

Attention:  Vice-President and General
Counsel

Telephone No.: (832) 366-2316

Facsimile No.: (832) 366-2586

 

(b)   if to the
Collateral Agent, at:

 

GENERAL ELECTRIC CAPITAL CORPORATION

335 Madison Avenue, 12th
Floor

New York, NY 10017

ATTN:  RPP Account
Officer

Fax:  (212) 370-8767

 

With a copy to:

 

GENERAL ELECTRIC CAPITAL
CORPORATION

201 Merritt 7

Norwalk, Connecticut  06851

ATTN:  Corporate Counsel

Global Sponsor Finance

Fax:  (203) 956-4216

 

40

 

(c)   if to any Bank
Lender Creditor (other than the Collateral Agent), at such address as such Bank
Lender Creditor shall have specified in the Bank Credit Agreement;

 

(d)   if to any
Representative or any Other Creditor, at such address as such Representative or
Other Creditor shall have specified in writing to each Assignor and the
Collateral Agent;

 

(e)   if to the Senior
Secured Notes Trustee or any other Second Lien Creditor, at:

 

Deutsche Bank Trust Company Americas

Corporate Trust and Agency Services

280 Park Avenue

New York, New York 10017

Attention: Dorothy Robinson

Telephone No.:  (212) 454-4274

Facsimile No.: (212) 454-2223;

 

and

 

(f)    if to the
Additional Senior Secured Notes Trustee or any other Note Lender Creditor, at:

 

The Bank of New York

101 Barclay Street - 8W

New York, NY 10286

Attention: Corporate Trust Division

Telephone No.:  (212) 815-4799

Telecopier No.:  (212) 815-5707

 

or at such other address or addressed to such other
individual as shall have been furnished in writing by any Person described
above to the party required to give notice hereunder.

 

12.2.  Waiver; Amendment.  None of the terms and conditions of this
Agreement or any other Security Document or any of the defined terms contained
in the Bank Credit Agreement that are incorporated herein or in any such other
Security Document pursuant to the terms of this Agreement or in any such other
Security Document (but only insofar as such terms are used in this Agreement or
in any such other Security Document) may be amended, changed, waived, modified
or varied in any manner whatsoever unless in writing duly signed by each Assignor
directly and adversely affected thereby and the Collateral Agent (with the
consent of the Required Secured Creditors); provided, (i) that any such
amendment, change, waiver, modification or variance (x) affecting the rights
and benefits of a single Class of First Lien Creditors (and not all First Lien
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors of such Class of First Lien Creditors and (y) materially
adversely affecting the rights and benefits of the Second Lien Creditors (and
not all Secured Creditors in a like or similar manner) shall require the
written consent of the Requisite Creditors of the Second Lien Creditors, (ii)
that any amendment, change, waiver, modification or variance to the extent
relating to any Second Lien Excluded Collateral may be made without the consent
of the Second Lien Creditors and (iii) that any amendment, change, waiver,
modification or

 

41

 

variance to the extent relating to the
Additional Senior Secured Note Excluded Collateral may be made without the
consent of the Note Lender Creditors or the Second Lien Creditors. For the
purpose of this Agreement and each other Security Document, the term “Class”
shall mean each class of Secured Creditors, i.e., whether (w) the Lender Creditors
as holders of the Credit Document Obligations, (x) the Other Creditors as the
holders of the Other Obligations, or (y) the Second Lien Creditors as holders
of the Second Lien Obligations. For the purpose of this Agreement and each
other Security Document, the term “Requisite Creditors” of any Class shall mean
(w) with respect to the Credit Document Obligations, the Requisite Lender
Creditors, (x) with respect to the Other Obligations, the holders of at least a
majority of all obligations outstanding from time to time under the US Hedge
Agreements, and (y) with respect
to the Second Lien Obligations, the Senior Secured Notes Trustee (acting at the
direction of the holders of at least a majority of the outstanding aggregate
principal amount of Senior Secured Notes).

 

12.3.  Obligations
Absolute.  The
obligations of each Assignor hereunder shall remain in full force and effect
without regard to, and shall not be impaired by: (a) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like of such Assignor; (b) any exercise or non-exercise, or any waiver
of, any right, remedy, power or privilege under or in respect of this Agreement
or any other Secured Debt Agreement; (c) any renewal, extension, amendment or
modification of or addition or supplement to or deletion from any Secured Debt
Agreement or any security for any of the Obligations; (d) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument including, without limitation, this Agreement; (e)
any furnishing of any additional security to the Collateral Agent or its
assignee or any acceptance thereof or any release of any security by the
Collateral Agent or its assignee; or (f) any limitation on any party’s
liability or obligations under any such instrument or agreement or any
invalidity or unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof; whether or not any Assignor shall have notice or
knowledge of any of the foregoing. The rights and remedies of the Collateral
Agent herein provided are cumulative and not exclusive of any rights or
remedies which the Collateral Agent would otherwise have.

 

12.4.  Successors
and Assigns.  This
Agreement shall be binding upon each Assignor and its successors and assigns
and shall inure to the benefit of the Collateral Agent and the other Secured
Creditors and their successors and assigns; provided, that no Assignor may
transfer or assign any or all of its rights or obligations hereunder without
the prior written consent of the Collateral Agent and otherwise in accordance with
the terms of the respective Secured Debt Agreements. All agreements,
statements, representations and warranties made by each Assignor herein or in
any certificate or other instrument delivered by such Assignor or on its behalf
under this Agreement shall be considered to have been relied upon by the
Secured Creditors and shall survive the execution and delivery of this
Agreement and the other Secured Debt Agreements regardless of any investigation
made by the Secured Creditors or on their behalf.

 

12.5.  Headings
Descriptive.
 The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.

 

12.6.  Governing Law.

 

42

 

(A)          THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.

 

(B)           
EACH ASSIGNOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ASSIGNORS, COLLATERAL
AGENT AND SECURED CREDITORS PERTAINING TO THIS AGREEMENT OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT, PROVIDED, THAT COLLATERAL AGENT,
SECURED CREDITORS AND ASSIGNORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY, AND, PROVIDED,
FURTHER, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE COLLATERAL AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR
THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
COLLATERAL AGENT.  EACH ASSIGNOR
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND EACH ASSIGNOR HEREBY WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON  CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  EACH ASSIGNOR HEREBY WAIVES PERSONAL SERVICE
OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT
AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH ASSIGNOR AT THE ADDRESS
SET FORTH IN SECTION 12.1 HERETO AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

 

(C)           BECAUSE
DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST
QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES ARISING HEREUNDER OR
RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG
AGENT, LENDERS, AND ASSIGNORS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS AGREEMENT
OR ANY OF THE OTHER SECURITY DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO.

 

43

 

12.7.  Assignor’s
Duties.
 It is expressly agreed, anything herein contained
to the contrary notwithstanding, that each Assignor shall remain liable to
perform all of the obligations, if any, assumed by it with respect to the
Collateral and neither the Collateral Agent nor any other Secured Creditor shall
have any obligations or liabilities with respect to any Collateral by reason of
or arising out of this Agreement, nor shall the Collateral Agent nor any other
Secured Creditor be required or obligated in any manner to perform or fulfill
any of the obligations of each Assignor under or with respect to any Collateral.

 

12.8.  Termination; Release.

 

(a)   After the
Termination Date, this Agreement and the security interests created hereby
shall terminate (provided that all indemnities set forth herein including,
without limitation, in Section 10.1 hereof and in Section 6 of Annex
N hereto shall survive such termination) and the Collateral Agent, at the
request and expense of the respective Assignor, will promptly execute and
deliver to such Assignor a proper instrument or instruments (including UCC
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Assignor (without recourse and without any representation or warranty)
such of the Collateral as may be in the possession of the Collateral Agent and
as has not theretofore been sold or otherwise applied or released pursuant to
this Agreement. As used in this Agreement, “Termination Date” shall mean the
date upon which the Commitments and all US Hedge Agreements entered into with
Other Creditors have been terminated, no Note is outstanding (and all US Loans have
been repaid in full), all US Letters of Credit have been terminated, all
Additional Senior Secured Notes and all other Obligations under the Note Credit
Documents have been repaid in full, all Second Lien Obligations have been
repaid in full and all Other Obligations (other than arising from indemnities
for which no request has been made) then owing have been paid in full;  provided, however, at such time as (x) all Bank
Credit Document Obligations have been paid in full in cash in accordance with
the terms thereof and all Commitments and US Letters of Credit under the Bank
Credit Agreement have been terminated or (y) each of the Bank Lender Creditors,
the Other Creditors have
released their Liens on all of the Collateral then, in either case, this
Agreement and the security interests created hereby shall terminate (provided
that all indemnities set forth herein (including, without limitation, in Section
10.1 hereof) and in Section 6 of Annex N hereto shall survive such termination)
unless, in the case of preceding clause (x), any Event of Default under either
the Note Credit Agreement or the Senior Secured Note Indenture exists as of the
date on which the Bank Credit Document Obligations are repaid in full and
terminated as described in such clause (x), in which case the security
interests created under this Agreement in favor of the Note Lender Creditors
and the Second Lien Creditors will not be released except to the extent the
Collateral or any portion thereof was disposed of in order to repay the First
Lien Obligations (although the security interests created in favor of the Note
Lender Creditors and the Second Lien Creditors will be released when such Event
of Default and all other Events of Default under the Note Credit Agreement and
the Senior Secured Note Indenture cease to exist).

 

(b)   In the event that
any part of the Collateral is sold or otherwise disposed of (to a Person other
than a Credit Party) in connection with a sale or other disposition permitted
by the respective Secured Debt Agreements or is otherwise released at the
direction of the

 

44

 

Required Secured Creditors, and the proceeds of any such sale or
disposition are applied in accordance with the terms of the respective Secured
Debt Agreements, to the extent required to be so applied, the Collateral Agent,
at the request and expense of such Assignor, will (i) duly assign, transfer and
deliver to such Assignor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold,
disposed of or released and as may be in the possession of the Collateral Agent
and has not theretofore been released pursuant to this Agreement and/or (ii)
execute such releases and discharges in respect of such Collateral as is then
being (or has been) so sold, disposed of or released as such Assignor may
reasonably request.

 

(c)   At any time that
the respective Assignor desires that Collateral be released as provided in Section
12.8(a) or (b) hereof, such Assignor shall deliver to the Collateral Agent
a certificate signed by an Authorized Officer of such Assignor stating that the
release of the respective Collateral is permitted pursuant to Section
12.8(a) or (b) hereof. If requested by the Collateral Agent (although the
Collateral Agent shall have no obligation to make any such request), the
relevant Assignor shall furnish appropriate legal opinions (from counsel, which
may be in-house counsel, reasonably acceptable to the Collateral Agent) to the
effect set forth in the immediately preceding sentence. The Collateral Agent
shall have no liability whatsoever to any Secured Creditor as the result of any
release of Collateral by it as permitted (or which the Collateral Agent in the
absence of gross negligence or willful misconduct (as determined by a court of
competent jurisdiction in a final and non-appealable decision) believes to be
permitted) by this Section 12.8.

 

(d)   Without limiting
the foregoing provisions of this Section 12.8, to the extent applicable
following the qualification of the Senior Secured Note Indenture under the
Trust Indenture Act (but only insofar as this Agreement applies to the Second
Lien Creditors), (i) the Assignors shall comply with Section 314(d) of the
Trust Indenture Act in connection with the release of property or Liens
hereunder and (ii) the parties hereto agree that if any amendments to this
Agreement or any other Security Document are required in order to comply with
the provisions of the Trust Indenture Act, such parties shall cooperate and act
in good faith to effect such amendments as promptly as practicable.

 

(e)   Without limiting
the foregoing provisions of this Section 12.8, to the extent applicable
following the qualification of the Note Credit Agreement under the Trust Indenture
Act (but only insofar as this Agreement applies to the Note Lender Creditors),
(i) the Assignors shall comply with Section 314(d) of the Trust Indenture Act
in connection with the release of property or Liens hereunder and (ii) the
parties hereto agree that if any amendments to this Agreement or any other
Security Document are required in order to comply with the provisions of the
Trust Indenture Act, such parties shall cooperate and act in good faith to
effect such amendments as promptly as practicable.

 

12.9.  Counterparts.  This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with each Assignor, the
Collateral Agent and the Senior Secured Notes Trustee.

 

45

 

12.10.  The Collateral Agent and the
Other Secured Creditors.

 

(a)   The Collateral
Agent will hold in accordance with this Agreement all items of the Collateral
at any time received under this Agreement. It is expressly understood and
agreed that the obligations of the Collateral Agent as holder of the Collateral
and interests therein and with respect to the disposition thereof, and
otherwise under this Agreement, are only those expressly set forth in this
Agreement and in Annex N hereto. The Collateral Agent shall act hereunder
on the terms and conditions set forth herein and in Annex N hereto.

 

(b)   In addition to the
provisions of clause (a) of this Section 12.10 and the other provisions
of this Agreement and the other Security Documents, the Secured Creditors (by their
acceptance of the benefits of this Agreement and the other applicable Security
Documents) also expressly acknowledge and agree to the other provisions of Annex
N hereto.

 

12.11.  Severability.  Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

 

12.12.  Limited Obligations.

 

(a)   It is the desire
and intent of each Assignor and the Secured Creditors that this Agreement shall
be enforced against each Assignor to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is
sought. Notwithstanding anything to the contrary contained herein, in
furtherance of the foregoing, it is noted that each Assignor that is a Subsidiary
of RPP USA and which has executed a guaranty of the Obligations pursuant to a
Secured Debt Agreement, the obligations of such Subsidiary thereunder may have
been limited as provided therein.

 

(b)   To the extent not
otherwise provided in a guaranty given by an Assignor in respect of the Second
Lien Obligations, each Assignor, other than Holdings, RPP USA, US Finance Corp.
and any other Subsidiary of Holdings that is not also a Subsidiary of RPP USA
(collectively, the “Second Lien Assignors”), the
Senior Secured Notes Trustee and each other Second Lien Creditor hereby confirm
that it is the intention of all such Persons that the grant of the security
interest hereunder by the second lien Assignors with respect to the Second Lien
Obligations and the Second Lien Obligations of each such second lien Assignor
hereunder does not constitute a fraudulent transfer or conveyance for purposes
of any bankruptcy law (as hereinafter defined), the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or
state law to the extent applicable to this Agreement and the Second Lien
Obligations of the second lien Assignors hereunder. To effectuate the foregoing
intention, the Senior Secured Notes Trustee, the other Second Lien Creditors
and the second lien Assignors hereby irrevocably agree that the Second Lien
Obligations of the second lien

 

46

 

Assignors hereunder at any time shall be limited to the maximum amount
(after taking into account any guaranty of the First Lien Obligations by the
second lien Assignors) as will result in the Second Lien Obligations of the
second lien Assignors hereunder not constituting a fraudulent transfer or
conveyance. For purposes hereof, “bankruptcy law” means any proceeding of the
type referred to in Section 6.1(vi) or (vii) of the Senior Secured Note
Indenture or Title 11, U.S. Code, or any similar foreign, federal or state law
for the relief of debtors.

 

(c)   To the extent not
otherwise provided in a guaranty given by an Assignor in respect of the First
Lien Obligations in favor of the Note Lender Creditors only, each Assignor,
other than Holdings, RPP USA, US Finance Corp. and any other Subsidiary of
Holdings that is not also a Subsidiary of RPP USA (collectively, the “note lien
Assignors”), the Additional Senior Secured Notes Trustee and each other Note
Lender Creditor hereby confirm that it is the intention of all such Persons
that the grant of the security interest hereunder by the note lien Assignors
with respect to such First Lien Obligations only and such First Lien
Obligations of each such note lien Assignor hereunder does not constitute a
fraudulent transfer or conveyance for purposes of any bankruptcy law (as
hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Agreement and such First Lien Obligations only of the
note lien Assignors hereunder. To effectuate the foregoing intention, the
Additional Senior Secured Notes Trustee, the other Note Lender Creditors and
the note lien Assignors hereby irrevocably agree that the First Lien
Obligations of the note lien Assignors hereunder in favor of the Note Lender
Creditors only, at any time shall be limited to the maximum amount (after
taking into account any guaranty of the other First Lien Obligations by the
note lien Assignors) as will result in such First Lien Obligations of the note
lien Assignors hereunder in favor of the Note Lender Creditors only, not
constituting a fraudulent transfer or conveyance. For purposes hereof, “bankruptcy
law” means any proceeding of the type referred to in Section 6.1(vi) or (vii)
of the Note Credit Agreement or title 11, U.S. Code, or any similar foreign,
federal or state law for the relief of debtors.

 

12.13.  Additional
Assignors.
 It is understood and agreed that any
Subsidiary Guarantor that is a US Credit Party that desires to become an Assignor
hereunder, or is required to execute a counterpart of this Agreement after the
date hereof pursuant to the requirements of the respective Secured Debt
Agreements, shall become an Assignor hereunder by executing a counterpart hereof
and delivering same to the Collateral Agent, or by executing an assumption agreement
in form and substance satisfactory to the Collateral Agent, (y) delivering
supplements to Annexes A through H, inclusive, and L and M, hereto
as are necessary to cause such Annexes to be complete and accurate with respect
to such additional Assignor on such date and (z) taking all actions as specified
in this Agreement as would have been taken by such Assignor had it been an
original party to this Agreement, in each case with all documents required
above to be delivered to the Collateral Agent and with all documents and
actions required above to be taken to the reasonable satisfaction of the
Collateral Agent.

 

12.14.  Intercreditor
Agreements.  Each party hereto agrees that the First Lien
Creditors (as among themselves) and the Second Lien Creditors (as among
themselves) may each enter into intercreditor agreements (or similar
arrangements) with the Collateral Agent (including the Amended and Restated Intercreditor
Agreement) governing the rights, benefits and privileges as among the First
Lien Creditors or the Second Lien Creditors, as the case may be, in respect of
the Collateral, this Agreement and the other Security Documents, including
without limitation, as to application of proceeds of the Collateral, voting
rights, control of the Collateral and waivers with

 

47

 

respect to the Collateral, in each case so
long as (A) the terms thereof do not violate or conflict with the provisions of
this Agreement or the other Security Documents, (B) the Collateral Agent agrees
in its sole discretion to enter into any such intercreditor agreement (or
similar arrangement) and (C) the Required Secured Creditors authorize the
Collateral Agent to enter into any such intercreditor agreement (or similar
arrangement). Notwithstanding preceding clauses (B) and (C), to the extent that
the Collateral Agent is not authorized by the Required Secured Creditors to
enter into any such intercreditor agreement (or similar arrangement) or does
not agree to enter into such intercreditor agreement (or similar arrangement),
such intercreditor agreement (or similar arrangement) shall not be binding upon
the Collateral Agent but, subject to the immediately succeeding sentence, may
still bind the other parties party thereto. In any event, if a respective
intercreditor agreement (or similar arrangement) exists, the provisions thereof
shall not be (or construed to be) an amendment, modification or other change to
this Agreement or any other Security Document and the provisions of this Agreement
and the other Security Documents shall remain in full force and effect in
accordance with the terms hereof and thereof (as such provisions may be
amended, modified or otherwise supplemented from time to time in accordance
with the terms thereof, including to give effect to any intercreditor agreement
(or similar arrangement).

 

12.15.  Intentionally
Omitted.

 

12.16.  No
Strict Construction.  The parties hereto have participated jointly
in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any provisions of this Agreement.

 

12.17.  Advice of
Counsel.  Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Section 12.6 and Section 12.16, with its counsel.

 

*     *     *

 

48

 

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

 

	
   

  	
  RESOLUTION
  PERFORMANCE PRODUCTS

  INC., as an Assignor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  Bausch

  	
   

  
	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  RESOLUTION
  PERFORMANCE PRODUCTS

  LLC, as an Assignor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  Bausch

  	
   

  
	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  RPP CAPITAL
  CORPORATION, as an Assignor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  Bausch

  	
   

  
	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Accepted and
  agreed this 24th day of January, 2005:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC
  CAPITAL

  CORPORATION, as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly A.
  Massa

  	
   

  
	
   

  	
   

  	
  Its Duly
  Authorized Signatory

  

 

 

[Signature
Page to Second Amended and Restated US Security Agreement]

 

 

	
  The undersigned
  as “Required Secured Creditors”

  and as “Requisite Lender Creditors” hereby consent

  to the foregoing amendment and restatement of the

  Original Security Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GENERAL ELECTRIC
  CAPITAL CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kimberly A.
  Massa

  	
   

  	
   

  	
   

  
	
  Its Duly
  Authorized Signatory

  	
   

  
					

 

[Signature
Page to Second Amended and Restated US Security Agreement]

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