Document:

exv10w2

 

EXECUTION VERSION

PLEDGE AND SECURITY AGREEMENT

dated as of July 20, 2006

between

EACH OF THE GRANTORS PARTY HERETO

and

CIT HEALTHCARE LLC

as Administrative Agent and Collateral Agent

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 1.
	 	DEFINITIONS; GRANT OF SECURITY	 	 	1	 
	1.1
	 	General Definitions	 	 	1	 
	1.2
	 	Definitions; Interpretation	 	 	8	 
	 
	 	 	 	 	 	 
	SECTION 2.
	 	GRANT OF SECURITY	 	 	8	 
	2.1
	 	Grant of Security	 	 	8	 
	2.2
	 	Certain Limited Exclusions	 	 	9	 
	 
	 	 	 	 	 	 
	SECTION 3.
	 	SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE	 	 	9	 
	3.1
	 	Security for Obligations	 	 	9	 
	3.2
	 	Continuing Liability Under Collateral	 	 	10	 
	 
	 	 	 	 	 	 
	SECTION 4.
	 	REPRESENTATIONS AND WARRANTIES AND COVENANTS	 	 	10	 
	4.1
	 	Generally	 	 	10	 
	4.2
	 	Equipment and Inventory	 	 	13	 
	4.3
	 	Receivables	 	 	15	 
	4.4
	 	Investment Related Property	 	 	17	 
	4.5
	 	Pledged Equity Interests	 	 	19	 
	4.6
	 	Pledged Debt	 	 	22	 
	4.7
	 	Investment Accounts	 	 	22	 
	4.8
	 	Material Contracts	 	 	24	 
	4.9
	 	Letter of Credit Rights	 	 	25	 
	4.10
	 	Intellectual Property	 	 	26	 
	4.11
	 	Commercial Tort Claims	 	 	30	 
	 
	 	 	 	 	 	 
	SECTION 5.
	 	ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL GRANTORS	 	 	30	 
	5.1
	 	Access; Right of Inspection	 	 	30	 
	5.2
	 	Further Assurances	 	 	30	 
	5.3
	 	Additional Grantors	 	 	32	 
	 
	 	 	 	 	 	 
	SECTION 6.
	 	COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT	 	 	32	 
	6.1
	 	Power of Attorney	 	 	32	 
	6.2
	 	No Duty on the Part of Collateral Agent or Secured Parties	 	 	33	 
	 
	 	 	 	 	 	 
	SECTION 7.
	 	REMEDIES	 	 	33	 
	7.1
	 	Generally	 	 	33	 
	7.2
	 	Application of Proceeds	 	 	35	 
	7.3
	 	Sales on Credit	 	 	35	 
	7.4
	 	Deposit Accounts	 	 	35	 
	7.5
	 	Investment Related Property	 	 	35	 

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	 	 	 	 	Page
	7.6
	 	Intellectual Property	 	 	36	 
	7.7
	 	Cash Proceeds	 	 	38	 
	 
	 	 	 	 	 	 
	SECTION 8.
	 	COLLATERAL AGENT	 	 	38	 
	 
	 	 	 	 	 	 
	SECTION 9.
	 	CONTINUING SECURITY INTEREST; TRANSFER OF LOANS	 	 	39	 
	 
	 	 	 	 	 	 
	SECTION 10.
	 	STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM	 	 	40	 
	 
	 	 	 	 	 	 
	SECTION 11.
	 	MISCELLANEOUS	 	 	40	 

SCHEDULE 4.1 — GENERAL INFORMATION

SCHEDULE 4.2 — LOCATION OF EQUIPMENT AND INVENTORY

SCHEDULE 4.4 — INVESTMENT RELATED PROPERTY

SCHEDULE 4.5 — MATERIAL CONTRACTS

SCHEDULE 4.6 — DESCRIPTION OF LETTERS OF CREDIT

SCHEDULE 4.7 — INTELLECTUAL PROPERTY — EXCEPTIONS

SCHEDULE 4.8 — COMMERCIAL TORT CLAIMS

EXHIBIT A — PLEDGE SUPPLEMENT

EXHIBIT B — UNCERTIFICATED SECURITIES CONTROL AGREEMENT

EXHIBIT C — SECURITIES ACCOUNT CONTROL AGREEMENT

EXHIBIT D — DEPOSIT ACCOUNT CONTROL AGREEMENT

EXHIBIT E — TRADEMARK AND SECURITY AGREEMENT

EXHIBIT F — COPYRIGHT SECURITY AGREEMENT

EXHIBIT G — PATENT SECURITY AGREEMENT

-ii-

 

          This PLEDGE AND SECURITY AGREEMENT, dated as of July ___, 2006 (this “Agreement”), between
EACH OF THE UNDERSIGNED, whether as an original signatory hereto or as an Additional Grantor (as
herein defined) (each, a “Grantor”), and CIT HEALTHCARE LLC (“CIT Healthcare”), as collateral agent
for the Secured Parties (as herein defined) (in such capacity, together with its successors and
assigns in such capacity, the “Collateral Agent”).

RECITALS:

          WHEREAS, reference is made to that certain Credit and Guaranty Agreement, dated as of the date
hereof (as it may be amended, amended and restated, joined, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among AMERICAN MEDICAL SYSTEMS, INC., a Delaware corporation
(the “Borrower”), AMERICAN MEDICAL SYSTEMS HOLDINGS, INC., a Delaware corporation (“Holdings”),
CERTAIN SUBSIDIARIES OF HOLDINGS, as guarantors (together with Holdings, the “Guarantors,” and the
Borrower and the Guarantors sometimes hereinafter referred to collectively as the “Credit Parties”
and individually as a “Credit Party”), CIT CAPITAL SECURITIES LLC, as Co-Lead Arranger and as Sole
Bookrunner, KEYBANK NATIONAL ASSOCIATION, as Co-Lead Arranger and as Syndication Agent, GENERAL
ELECTRIC CAPITAL CORPORATION, as Documentation Agent, and CIT HEALTHCARE LLC (“CIT Healthcare”), as
administrative agent for the lenders (in such capacity, together with its successors and assigns in
such capacity, the “Administrative Agent”) and as collateral agent for the lenders (in such
capacity, together with its successors and assigns in such capacity, the “Collateral Agent”), and
the other Lenders party thereto from time to time;

          WHEREAS, subject to the terms and conditions of the Credit Agreement, certain Grantors may
enter into one or more Hedge Agreements with one or more Lender Counterparties; and

          WHEREAS, in consideration of the extensions of credit and other accommodations of Lenders and
Lender Counterparties as set forth in the Credit Agreement and the Hedge Agreements, respectively,
each Grantor has agreed to secure such Grantor’s obligations under the Credit Documents and the
Hedge Agreements as set forth herein.

          NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, each Grantor and the Collateral Agent agree as follows:

SECTION 1. DEFINITIONS; GRANT OF SECURITY.

     1.1 General Definitions. In this Agreement, the following terms shall have the following
meanings:

          “Account Debtor” shall mean each Person who is obligated on a Receivable or any Supporting
Obligation related thereto.

          “Accounts”
shall mean all “accounts” as defined in Article 9 of the UCC.

 

 

          “Additional Grantors” shall have the meaning assigned in Section 5.3.

          “Agreement” shall have the meaning set forth in the preamble.

          “Assigned Agreements” shall mean all agreements and contracts to which such Grantor is a party
as of the date hereof, or to which such Grantor becomes a party after the date hereof, including,
without limitation, each Material Contract, as each such agreement may be amended, supplemented or
otherwise modified from time to time.

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

          “Borrower” shall have meaning set forth in the recitals.

          “Cash Proceeds” shall have the meaning assigned in Section 7.7.

          “Chattel Paper” shall mean all “chattel paper” as defined in Article 9 of the UCC, including,
without limitation, “electronic chattel paper” or “tangible chattel paper”, as each term is defined
in Article 9 of the UCC.

          “Collateral” shall have the meaning assigned in Section 2.1.

          “Collateral Account” shall mean any account established by the Collateral Agent.

          “Collateral Agent” shall have the meaning set forth in the preamble.

          “Collateral Records” shall mean books, records, ledger cards, files, correspondence, customer
lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes,
disks and related data processing software and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon.

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

          “Commercial Tort Claims” shall mean all “commercial tort claims” as defined in Article 9 of
the UCC, including, without limitation, all commercial tort claims listed on Schedule 4.8 (as such
schedule may be amended or supplemented from time to time).

          “Commodities Accounts” (i) shall mean all “commodity accounts” as defined in Article 9 of the
UCC and (ii) shall include, without limitation, all of the accounts listed on Schedule 4.4 under
the heading “Commodities Accounts” (as such schedule may be amended or supplemented from time to
time).

          “Controlled Foreign Corporation” shall mean “controlled foreign corporation” as defined in the
Tax Code.

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          “Copyright Licenses” shall mean any and all agreements providing for the granting of any right
in or to Copyrights (whether such Grantor is licensee or licensor thereunder) including, without
limitation, each agreement referred to in Schedule 4.7(B) (as such schedule may be amended or
supplemented from time to time).

          “Copyrights” shall mean all United States, and foreign copyrights (including Community
designs), including but not limited to copyrights in software and databases, and all Mask Works (as
defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, and,
with respect to any and all of the foregoing: (i) all registrations and applications therefor
including, without limitation, the registrations and applications referred to in Schedule 4.7(A)
(as such schedule may be amended or supplemented from time to time), (ii) all extensions and
renewals thereof, (iii) all rights corresponding thereto throughout the world, (iv) all rights to
sue for past, present and future infringements thereof, and (v) all Proceeds of the foregoing,
including, without limitation, licenses, royalties, income, payments, claims, damages and proceeds
of suit.

          “Credit Agreement” shall have the meaning set forth in the recitals.

          “Deposit Accounts” (i) shall mean all “deposit accounts” as defined in Article 9 of the UCC
and (ii) shall include, without limitation, all of the accounts listed on Schedule 4.4 under the
heading “Deposit Accounts” (as such schedule may be amended or supplemented from time to time).

          “Documents” shall mean all “documents” as defined in Article 9 of the UCC.

          “Equipment” shall mean: (i) all “equipment” as defined in Article 9 of the UCC, (ii) all
machinery, manufacturing equipment, data processing equipment, computers, office equipment,
furnishings, furniture, appliances, fixtures and tools (in each case, regardless of whether
characterized as equipment under the UCC) and (iii) all accessions or additions thereto, all parts
thereof, whether or not at any time of determination incorporated or installed therein or attached
thereto, and all replacements therefor, wherever located, now or hereafter existing, including any
fixtures.

          “General Intangibles” (i) shall mean all “general intangibles” as defined in Article 9 of the
UCC, including “payment intangibles” also as defined in Article 9 of the UCC and (ii) shall
include, without limitation, all interest rate or currency protection or hedging arrangements, all
tax refunds, all licenses, permits, concessions and authorizations, all Assigned Agreements and all
Intellectual Property (in each case, regardless of whether characterized as general intangibles
under the UCC).

          “Goods” (i) shall mean all “goods” as defined in Article 9 of the UCC and (ii) shall include,
without limitation, all Inventory and Equipment (in each case, regardless of whether characterized
as goods under the UCC).

          “Grantors” shall have the meaning set forth in the preamble.

          “Indemnitee” shall mean the Collateral Agent, and its and its Affiliates’ officers, partners,
directors, trustees, employees, and agents.

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          “Instruments” shall mean all “instruments” as defined in Article 9 of the UCC.

          “Insurance” shall mean (i) all insurance policies covering any or all of the Collateral
(regardless of whether the Collateral Agent is the loss payee thereof) and (ii) any key man life
insurance policies.

          “Intellectual Property” shall mean, collectively, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets, and the
Trade Secret Licenses.

          “Inventory” shall mean (i) all “inventory” as defined in Article 9 of the UCC and (ii) all
goods held for sale or lease or to be furnished under contracts of service or so leased or
furnished, all raw materials, work in process, finished goods, and materials used or consumed in
the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such
inventory or otherwise used or consumed in any Grantor’s business; all goods in which any Grantor
has an interest in mass or a joint or other interest or right of any kind; and all goods which are
returned to or repossessed by any Grantor, all computer programs embedded in any goods and all
accessions thereto and products thereof (in each case, regardless of whether characterized as
inventory under the UCC).

          “Investment Accounts” shall mean the Collateral Account, Securities Accounts, Commodities
Accounts and Deposit Accounts.

          “Investment Related Property” shall mean: (i) all “investment property” (as such term is
defined in Article 9 of the UCC) and (ii) all of the following (regardless of whether classified as
investment property under the UCC): all Pledged Equity Interests, Pledged Debt, the Investment
Accounts and certificates of deposit.

          “Lender” shall have the meaning set forth in the recitals.

          “Lender Counterparty” shall mean each Lender or any Affiliate of a Lender counterparty to a
Hedge Agreement including, without limitation, each such Affiliate that enters into a joinder
agreement with the Collateral Agent.

          “Letter of Credit Right” shall mean “letter-of-credit right” as defined in Article 9 of the
UCC.

          “Lien” shall mean (i) any lien, mortgage, pledge, assignment, security interest, charge or
encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale
or other title retention agreement, and any lease in the nature thereof) and any option, trust or
other preferential arrangement having the practical effect of any of the foregoing and (ii) in the
case of Pledged Equity Interests, any purchase option, call or similar right of a third party with
respect to such Pledged Equity Interests.

          “Money” shall mean “money” as defined in the UCC.

          “Non-Assignable Contract” shall mean any material agreement, contract or license to which any
Grantor is a party that by its terms purports to restrict or prevent the

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assignment or granting of a security interest therein (either by its terms or by any federal
or state statutory prohibition or otherwise irrespective of whether such prohibition or restriction
is enforceable under Section 9-406 through 409 of the UCC).

          “Off-Site Equipment and Inventory” shall mean those items of Equipment or Inventory, title to
which is retained by a Grantor, but which is held from time to time (i) by customers of such
Grantor’s products on consignment on substantially similar terms as set forth in the sample or
representative “Inventory Agreement” previously provided to the Collateral Agent and used in the
ordinary course of business of such Grantor for customers purchasing products from such Grantor on
consignment, (ii) by salespersons for the purpose of providing demonstration models or samples to
potential customers, or (iii) by hospitals, clinics, physicians’ offices or similar medical
establishments as service loaners, clinical research units, marketing and demo units, and for use
under pay for use agreements.

          “Patent Licenses” shall mean all agreements providing for the granting of any right in or to
Patents (whether such Grantor is licensee or licensor thereunder) including, without limitation,
each agreement referred to in Schedule 4.7(D) (as such schedule may be amended or supplemented from
time to time).

          “Patents” shall mean all United States and foreign patents and certificates of invention, or
similar industrial property rights, and applications for any of the foregoing, including, but not
limited to: (i) each patent and patent application referred to in Schedule 4.7(C) hereto (as such
schedule may be amended or supplemented from time to time), (ii) all reissues, divisions,
continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (iii) all
rights corresponding thereto throughout the world, (iv) all inventions and improvements described
therein, (v) all rights to sue for past, present and future infringements thereof, (vi) all
licenses, claims, damages, and proceeds of suit arising therefrom, and (vii) all Proceeds of the
foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages,
and proceeds of suit.

          “Pledge Supplement” shall mean any supplement to this Agreement in substantially the form of
Exhibit A.

          “Pledged Debt” shall mean all Indebtedness owed to such Grantor, including, without
limitation, all Indebtedness described on Schedule 4.4(A) under the heading “Pledged Debt” (as such
schedule may be amended or supplemented from time to time), issued by the obligors named therein,
the instruments evidencing such Indebtedness, and all interest, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such Indebtedness.

          “Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests, Pledged
Partnership Interests and Pledged Trust Interests.

          “Pledged LLC Interests” shall mean all interests in any limited liability company including,
without limitation, all limited liability company interests listed on Schedule 4.4(A) under the
heading “Pledged LLC Interests” (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such limited liability

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company interests and any interest of such Grantor on the books and records of such limited
liability company or on the books and records of any securities intermediary pertaining to such
interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities
and other property or proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability company interests.

          “Pledged Partnership Interests” shall mean all interests in any general partnership, limited
partnership, limited liability partnership or other partnership including, without limitation, all
partnership interests listed on Schedule 4.4(A) under the heading “Pledged Partnership Interests”
(as such schedule may be amended or supplemented from time to time) and the certificates, if any,
representing such partnership interests and any interest of such Grantor on the books and records
of such partnership or on the books and records of any securities intermediary pertaining to such
interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities
and other property or proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such partnership interests.

          “Pledged Stock” shall mean all shares of capital stock owned by such Grantor, including,
without limitation, all shares of capital stock described on Schedule 4.4(A) under the heading
“Pledged Stock” (as such schedule may be amended or supplemented from time to time), and the
certificates, if any, representing such shares and any interest of such Grantor in the entries on
the books of the issuer of such shares or on the books of any securities intermediary pertaining to
such shares, and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares.

          “Pledged Trust Interests” shall mean all interests in a Delaware business trust or other trust
including, without limitation, all trust interests listed on Schedule 4.4(A) under the heading
“Pledged Trust Interests” (as such schedule may be amended or supplemented from time to time) and
the certificates, if any, representing such trust interests and any interest of such Grantor on the
books and records of such trust or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such trust interests.

          “Proceeds” shall mean: (i) all “proceeds” as defined in Article 9 of the UCC, (ii) payments
or distributions made with respect to any Investment Related Property and (iii) whatever is
receivable or received when Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary.

          “Receivables” shall mean all rights to payment, whether or not earned by performance, for
goods or other property sold, leased, licensed, assigned or otherwise disposed of, or services
rendered or to be rendered, including, without limitation all such rights constituting or evidenced
by any Account, Chattel Paper, Instrument, General Intangible or Investment Related Property,
together with all of Grantor’s rights, if any, in any goods or other

6

 

property giving rise to such right to payment and all Collateral Support and Supporting
Obligations related thereto and all Receivables Records.

          “Receivables Records” shall mean (i) all original copies of all documents, instruments or
other writings or electronic records or other Records evidencing the Receivables, (ii) all books,
correspondence, credit or other files, Records, ledger sheets or cards, invoices, and other papers
relating to Receivables, including, without limitation, all tapes, cards, computer tapes, computer
discs, computer runs, record keeping systems and other papers and documents relating to the
Receivables, whether in the possession or under the control of Grantor or any computer bureau or
agent from time to time acting for Grantor or otherwise, (iii) all evidences of the filing of
financing statements and the registration of other instruments in connection therewith, and
amendments, supplements or other modifications thereto, notices to other creditors or secured
parties, and certificates, acknowledgments, or other writings, including, without limitation, lien
search reports, from filing or other registration officers, (iv) all credit information, reports
and memoranda relating thereto and (v) all other written or nonwritten forms of information related
in any way to the foregoing or any Receivable.

          “Record” shall have the meaning specified in Article 9 of the UCC.

          “Secured Obligations” shall have the meaning assigned in Section 3.1.

          “Secured Parties” shall mean the Agents, Lenders and the Lender Counterparties and shall
include, without limitation, all former Agents, Lenders and Lender Counterparties to the extent
that any Obligations owing to such Persons were incurred while such Persons were Agents, Lenders or
Lender Counterparties and such Obligations have not been paid or satisfied in full.

          “Securities Accounts” (i) shall mean all “securities accounts” as defined in Article 8 of the
UCC and (ii) shall include, without limitation, all of the accounts listed on Schedule 4.4(A) under
the heading “Securities Accounts” (as such schedule may be amended or supplemented from time to
time).

          “Supporting Obligation” shall mean all “supporting obligations” as defined in Article 9 of the
UCC.

          “Tax Code” shall mean the United States Internal Revenue Code of 1986, as amended from time to
time.

          “Trademark Licenses” shall mean any and all agreements providing for the granting of any right
in or to Trademarks (whether such Grantor is licensee or licensor thereunder) including, without
limitation, each agreement referred to in Schedule 4.7(F) (as such schedule may be amended or
supplemented from time to time).

          “Trademarks” shall mean all United States, and foreign trademarks, trade names, corporate
names, company names, business names, fictitious business names, Internet domain names, service
marks, certification marks, collective marks, logos, other source or business identifiers, designs
and general intangibles of a like nature, all registrations and applications for any of the
foregoing including, but not limited to: (i) the registrations and

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applications referred to in Schedule 4.7(E) (as such schedule may be amended or supplemented
from time to time), (ii) all extensions or renewals of any of the foregoing, (iii) all of the
goodwill of the business connected with the use of and symbolized by the foregoing, (iv) the right
to sue for past, present and future infringement or dilution of any of the foregoing or for any
injury to goodwill, and (v) all Proceeds of the foregoing, including, without limitation, licenses,
royalties, income, payments, claims, damages, and proceeds of suit.

          “Trade Secret Licenses” shall mean any and all agreements providing for the granting of any
right in or to Trade Secrets (whether such Grantor is licensee or licensor thereunder) including,
without limitation, each agreement referred to in Schedule 4.7(G) (as such schedule may be amended
or supplemented from time to time).

          “Trade Secrets” shall mean all trade secrets and all other confidential or proprietary
information and know-how whether or not such Trade Secret has been reduced to a writing or other
tangible form, including all documents and things embodying, incorporating, or referring in any way
to such Trade Secret, including but not limited to: (i) the right to sue for past, present and
future misappropriation or other violation of any Trade Secret, and (ii) all Proceeds of the
foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages,
and proceeds of suit.

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

          “United States” shall mean the United States of America.

     1.2 Definitions; Interpretation. All capitalized terms used herein (including the preamble
and recitals hereto) and not otherwise defined herein shall have the meanings ascribed thereto in
the Credit Agreement or, if not defined therein, in the UCC. References to “Sections,” “Exhibits”
and “Schedules” shall be to Sections, Exhibits and Schedules, as the case may be, of this Agreement
unless otherwise specifically provided. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on the reference. The
use herein of the word “include” or “including”, when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as “without limitation” or “but not limited to” or words of similar
import) is used with reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement, term or matter. If
any conflict or inconsistency exists between this Agreement and the Credit Agreement, the Credit
Agreement shall govern. All references herein to provisions of the UCC shall include all successor
provisions under any subsequent version or amendment to any Article of the UCC.

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SECTION 2. GRANT OF SECURITY.

     2.1 Grant of Security. Each Grantor hereby grants to the Collateral Agent a security interest
in and continuing lien on all of such Grantor’s right, title and interest in, to and under all
personal property of such Grantor including, but not limited to the following, in each case whether
now owned or existing or hereafter acquired or arising and wherever located (all of which being
hereinafter collectively referred to as the “Collateral”):

          (a) Accounts;

          (b) Chattel Paper;

          (c) Documents;

          (d) General Intangibles;

          (e) Goods;

          (f) Instruments;

          (g) Insurance;

          (h) Intellectual Property;

          (i) Investment Related Property;

          (j) Letter of Credit Rights;

          (k) Money;

          (l) Receivables and Receivable Records;

          (m) Commercial Tort Claims;

          (n) to the extent not otherwise included above, all Collateral Records, Collateral Support and
Supporting Obligations relating to any of the foregoing; and

          (o) to the extent not otherwise included above, all Proceeds, products, accessions, rents and
profits of or in respect of any of the foregoing.

     2.2 Certain Limited Exclusions. Notwithstanding anything herein to the contrary, in no event
shall the Collateral include or the security interest granted under Section 2.1 hereof attach to
(a) any lease, license, contract, property rights or agreement to which any Grantor is a party or
any of its rights or interests thereunder if and for so long as the grant of such security interest
shall constitute or result in (i) the irrevocable abandonment, invalidation or unenforceability of
any right, title or interest of any Grantor therein or (ii) in a breach or termination pursuant to
the terms of, or a default under, any such lease, license, contract property rights or agreement
(other than to the extent that any such term would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity),
provided however that the Collateral shall include and such

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security interest shall attach immediately at such time as the condition causing such
irrevocable abandonment, invalidation or unenforceability shall be remedied and to the extent
severable, shall attach immediately to any portion of such Lease, license, contract, property
rights or agreement that does not result in any of the consequences specified in (i) or (ii) above;
or (b) any of the outstanding capital stock of a Controlled Foreign Corporation in excess of 65% of
the voting power of all classes of capital stock of such Controlled Foreign Corporation entitled to
vote; provided that immediately upon the amendment of the Tax Code to allow the pledge of a greater
percentage of the voting power of capital stock in a Controlled Foreign Corporation without adverse
tax consequences, and provided that this Agreement is still in effect, the Collateral shall
include, and the security interest granted by each Grantor shall attach to, such greater percentage
of capital stock of each Controlled Foreign Corporation.

SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.

     3.1 Security for Obligations. This Agreement secures, and the Collateral is collateral
security for, the prompt and complete payment or performance in full when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)), of all
Obligations with respect to every Grantor (the “Secured Obligations”).

     3.2 Continuing Liability Under Collateral. Notwithstanding anything herein to the contrary,
(i) each Grantor shall remain liable for all obligations under the Collateral and nothing contained
herein is intended or shall be a delegation of duties to the Collateral Agent or any Secured Party,
(ii) each Grantor shall remain liable under each of the agreements included in the Collateral,
including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged
LLC Interests, to perform all of the obligations undertaken by it thereunder all in accordance with
and pursuant to the terms and provisions thereof and neither the Collateral Agent nor any Secured
Party shall have any obligation or liability under any of such agreements by reason of or arising
out of this Agreement or any other document related thereto nor shall the Collateral Agent nor any
Secured Party have any obligation to make any inquiry as to the nature or sufficiency of any
payment received by it or have any obligation to take any action to collect or enforce any rights
under any agreement included in the Collateral, including, without limitation, any agreements
relating to Pledged Partnership Interests or Pledged LLC Interests, and (iii) the exercise by the
Collateral Agent of any of its rights hereunder shall not release any Grantor from any of its
duties or obligations under the contracts and agreements included in the Collateral.

SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.

     4.1 Generally.

          (a) Representations and Warranties. Each Grantor hereby represents and warrants on
the Initial Closing Date and on the Second Closing Date (in each case, both immediately before and
immediately after giving effect to the Acquisition and the consummation of the transactions
contemplated by the Tender Offer) and on each Credit Date, that:

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          (i) it owns the Collateral purported to be owned by it or otherwise has the rights it
purports to have in each item of Collateral and, as to all Collateral whether now existing
or hereafter acquired, will continue to own or have such rights in each item of the
Collateral, in each case free and clear of any and all Liens, rights or claims of all other
Persons, including, without limitation, liens arising as a result of such Grantor becoming
bound (as a result of merger or otherwise) as debtor under a security agreement entered into
by another Person other than Permitted Liens;

          (ii) it has indicated on Schedule 4.1(A)(as such schedule may be amended or
supplemented from time to time): (w) the type of organization of such Grantor, (x) the
jurisdiction of organization of such Grantor, (y) its organizational identification number
and (z) the jurisdiction where the chief executive office or its sole place of business is
(or the principal residence if such Grantor is a natural person), and for the one-year
period preceding the date hereof has been, located.

          (iii) the full legal name of such Grantor is as set forth on Schedule 4.1(A) and it has
not done in the last five (5) years, and does not do, business under any other name
(including any trade name or fictitious business name) except for those names set forth on
Schedule 4.1(B) (as such schedule may be amended or supplemented from time to time);

          (iv) except as provided on Schedule 4.1(C), it has not changed its name, jurisdiction
of organization, chief executive office or sole place of business (or principal residence if
such Grantor is a natural person) or its corporate structure in any way (e.g., by merger,
consolidation, change in corporate form or otherwise) within the past five (5) years;

          (v) it has not within the last five (5) years become bound (whether as a result of
merger or otherwise) as debtor under a security agreement entered into by another Person,
which has not heretofore been terminated other than the agreements identified on Schedule
4.1(D) hereof (as such schedule may be amended or supplemented from time to time);

          (vi) with respect to each agreement identified on Schedule 4.1(D), it has indicated on
Schedule 4.1 (A) and Schedule 4.1(B) the information required pursuant to Section
4.1(a)(ii), (iii) and (iv) with respect to the debtor under each such agreement;

          (vii) (u) upon the filing of all UCC financing statements naming each Grantor as
“debtor” and the Collateral Agent as “secured party” and describing the Collateral in the
filing offices set forth opposite such Grantor’s name on Schedule 4.1(E) hereof (as such
schedule may be amended or supplemented from time to time) and other filings delivered by
each Grantor, (v) upon delivery of all Instruments, Chattel Paper and certificated Pledged
Equity Interests and Pledged Debt, (w) upon sufficient identification of Commercial Tort
Claims, (x) upon execution of a control agreement establishing the Collateral Agent’s
“control” (within the meaning of Section 8-106, 9-106 or 9-104 of the UCC, as applicable)
with respect to any Investment Account, (y) upon consent of the issuer with respect to
Letter of Credit Rights, and (z) to the extent not subject to Article 9

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of the UCC, upon recordation of the security interests granted hereunder in Patents,
Trademarks and Copyrights in the applicable intellectual property registries, including but
not limited to the United States Patent and Trademark Office and the United States Copyright
Office, the security interests granted to the Collateral Agent hereunder constitute valid
and perfected first priority Liens (subject in the case of priority only to Permitted Liens
and to the rights of the United States government (including any agency or department
thereof) with respect to United States government Receivables) on all of the Collateral;

          (viii) all actions and consents, including all filings, notices, registrations and
recordings necessary or desirable for the exercise by the Collateral Agent of the voting or
other rights provided for in this Agreement or the exercise of remedies in respect of the
Collateral have been made or obtained;

          (ix) other than the financing statements filed in favor of the Collateral Agent, no
effective UCC financing statement, fixture filing or other instrument similar in effect
under any applicable law covering all or any part of the Collateral is on file in any filing
or recording office except for (x) financing statements for which proper termination
statements have been delivered to the Collateral Agent for filing and (y) financing
statements filed in connection with Permitted Liens;

          (x) no authorization, approval or other action by, and no notice to or filing with, any
Governmental Authority or regulatory body is required for either (i) the pledge or grant by
any Grantor of the Liens purported to be created in favor of the Collateral Agent hereunder
or (ii) the exercise by Collateral Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created hereunder or created or provided for by
applicable law), except (A) for the filings contemplated by clause (vii) above and (B) as
may be required, in connection with the disposition of any Investment Related Property, by
laws generally affecting the offering and sale of Securities;

          (xi) all information supplied by any Grantor with respect to any of the Collateral (in
each case taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects;

          (xii) none of the Collateral constitutes, or is the Proceeds of, “farm products” (as
defined in the UCC);

          (xiii) it does not own any “as extracted collateral” (as defined in the UCC) or any
timber to be cut;

          (xiv) except as described on Schedule 4.1(D), such Grantor has not become bound as a
debtor, either by contract or by operation of law, by a security agreement previously
entered into by another Person; and

          (xv) such Grantor has been duly organized as an entity of the type as set forth
opposite such Grantor’s name on Schedule 4.1(A) solely under the laws of the jurisdiction as
set forth opposite such Grantor’s name on Schedule 4.1(A) and remains
duly existing as such. Such Grantor has not filed any certificates of domestication,
transfer or continuance in any other jurisdiction.

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          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

          (i) except for the security interest created by this Agreement, it shall not create or
suffer to exist any Lien upon or with respect to any of the Collateral, except Permitted
Liens, and such Grantor shall defend the Collateral against all Persons at any time claiming
any interest therein;

          (ii) it shall not produce, use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute, regulation or
ordinance or any policy of insurance covering the Collateral;

          (iii) it shall not change such Grantor’s name, identity, corporate structure (e.g., by
merger, consolidation, change in corporate form or otherwise) sole place of business (or
principal residence if such Grantor is a natural person), chief executive office, type of
organization or jurisdiction of organization or establish any trade names unless it shall
have (a) notified the Collateral Agent in writing, by executing and delivering to the
Collateral Agent a completed Pledge Supplement, substantially in the form of Exhibit A
attached hereto, together with all Supplements to Schedules thereto, at least thirty (30)
days prior (or such shorter period of time as is consented to by the Collateral Agent in
writing) to any such change or establishment, identifying such new proposed name, identity,
corporate structure, sole place of business (or principal residence if such Grantor is a
natural person), chief executive office, jurisdiction of organization or trade name and
providing such other information in connection therewith as the Collateral Agent may
reasonably request and (b) taken all actions necessary or advisable to maintain the
continuous validity, perfection and the same or better priority of the Collateral Agent’s
security interest in the Collateral intended to be granted and agreed to hereby;

          (iv) if the Collateral Agent or any Secured Party gives value to enable Grantor to
acquire rights in or the use of any Collateral, it shall use such value for such purposes
and such Grantor further agrees that repayment of any Obligation shall apply on a “first-in,
first-out” basis so that the portion of the value used to acquire rights in any Collateral
shall be paid in the chronological order such Grantor acquired rights therein;

          (v) it shall pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Collateral, except to the extent the validity thereof
is being contested in good faith; provided, such Grantor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five (5) days prior to the date of any
proposed sale under any judgment, writ or warrant of attachment entered or filed against
such Grantor or any of the Collateral as a result of the failure to make such payment;

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          (vi) upon any Authorized Officer of Grantor obtaining knowledge thereof, such Grantor
shall promptly notify the Collateral Agent in writing of any event that may have a material
adverse effect on the value of the Collateral or any material portion thereof, the ability
of any Grantor or the Collateral Agent to dispose of the Collateral or any portion thereof,
or the rights and remedies of the Collateral Agent in relation thereto, including, without
limitation, the levy of any legal process against the Collateral or any portion thereof;

          (vii) it shall not take or permit any action which could impair the Collateral Agent’s
rights in the Collateral; and

          (viii) it shall not sell, transfer or assign (by operation of law or otherwise) any
Collateral except as otherwise in accordance with the Credit Agreement.

     4.2 Equipment and Inventory.

          (a) Representations and Warranties. Each Grantor hereby represents and warrants on
the Initial Closing Date and on the Second Closing Date (in each case, both immediately before and
immediately after giving effect to the Acquisition and the consummation of the transactions
contemplated by the Tender Offer) and on each Credit Date, that:

          (i) all of the Equipment and Inventory included in the Collateral is kept only at the
locations specified in Schedule 4.2 (as such schedule may be amended or supplemented from
time to time);

          (ii) any Goods now or hereafter produced by any Grantor included in the Collateral have
been and will be produced in compliance with the requirements of the Fair Labor Standards
Act, as amended; and

          (iii) none of the Inventory or Equipment is in the possession of an issuer of a
negotiable document (as defined in Section 7-104 of the UCC) therefor or otherwise in the
possession of a bailee or a warehouseman.

          (b) Covenants and Agreements. Each Grantor covenants and agrees that:

          (i) it shall (a) keep the Equipment, Inventory and any Documents evidencing any
Equipment and Inventory in the locations specified or described on Schedule 4.2 (as such
schedule may be amended or supplemented from time to time) unless it shall have (x), with
respect to all such Equipment and Inventory and any Documents evidencing such Equipment and
Inventory (other than Off-Site Equipment and Inventory)) notified the Collateral Agent in
writing, by executing and delivering to the Collateral Agent a completed Pledge Supplement,
substantially in the form of Exhibit A attached hereto, together with all Supplements to
Schedules thereto, at least thirty (30) days prior (or such shorter period of time as is
consented to by the Collateral Agent in writing) to any change in locations, identifying
such new locations and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (y) taken all actions necessary or advisable to
maintain the continuous validity, perfection and the same or better priority of the
Collateral Agent’s security interest in the

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Collateral intended to be granted and agreed to hereby, or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder, with respect to such
Equipment and Inventory, and (b) provide the Collateral Agent on a monthly basis an updated
Schedule 4.2 setting forth the locations of all of the Equipment and Inventory of such
Grantor;

          (ii) it shall keep correct and accurate records of the Inventory, itemizing and
describing the kind, type and quantity of Inventory, such Grantor’s cost therefor and (where
applicable) the current list prices for the Inventory, in each case, in reasonable detail as
is customarily maintained under similar circumstances by Persons of established reputation
engaged in similar business, and in any event in conformity with GAAP;

          (iii) it shall not deliver any Document evidencing any Equipment and Inventory to any
Person other than the issuer of such Document to claim the Goods evidenced therefor or the
Collateral Agent;

          (iv) if any Equipment or Inventory is in possession or control of any third party, upon
the occurrence and during the continuation of any Event of Default with respect to any
Off-Site Equipment and Inventory, and upon the written request of the Collateral Agent with
respect to all such other Equipment or Inventory, each Grantor shall join with the
Collateral Agent in notifying the third party of the Collateral Agent’s security interest
and obtaining an acknowledgment from the third party that it is holding the Equipment and
Inventory for the benefit of the Collateral Agent; and

          (v) with respect to any item of Equipment which is covered by a certificate of title
under a statute of any jurisdiction under the law of which indication of a security interest
on such certificate is required as a condition of perfection thereof, upon the reasonable
request of the Collateral Agent, (A) provide information with respect to any such Equipment
in excess of $50,000 individually or $200,000 in the aggregate, (B) execute and file with
the registrar of motor vehicles or other appropriate authority in such jurisdiction an
application or other document requesting the notation or other indication of the security
interest created hereunder on such certificate of title, and (C) deliver to the Collateral
Agent copies of all such applications or other documents filed during such calendar quarter
and copies of all such certificates of title issued during such calendar quarter indicating
the security interest created hereunder in the items of Equipment covered thereby.

     4.3 Receivables

          (a) Representations and Warranties. Each Grantor hereby represents and warrants on
the Initial Closing Date and on the Second Closing Date (in each case, both immediately before and
immediately after giving effect to the Acquisition and the consummation of the transactions
contemplated by the Tender Offer) and on each Credit Date, that:

          (i) each Receivable (a) is and will be the legal, valid and binding obligation of the
Account Debtor in respect thereof, representing an unsatisfied obligation

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of such Account Debtor, (b) is and will be enforceable in accordance with its terms,
(c) is not and will not be subject to any setoffs, defenses, taxes, counterclaims (except
with respect to refunds, returns and allowances in the ordinary course of business with
respect to damaged merchandise) and (d) is and will be in compliance with all applicable
laws, whether federal, state, local or foreign;

          (ii) No Receivable in excess of $250,000 individually or $1,000,000 in the aggregate
requires the consent of the Account Debtor in respect thereof in connection with the pledge
hereunder, except any consent which has been obtained;

          (iii) no Receivable is evidenced by, or constitutes, an Instrument or Chattel Paper
which has not been delivered to, or otherwise subjected to the control of, the Collateral
Agent to the extent required by, and in accordance with Section 4.3(c); and

          (iv) each Grantor has delivered to the Collateral Agent a complete and correct copy of
each standard form of document under which a Receivable may arise.

          (b) Covenants and Agreements: Each Grantor hereby covenants and agrees that:

          (i) it shall keep and maintain at its own cost and expense satisfactory and complete
records of the Receivables, including, but not limited to, the originals of all
documentation or Records thereof with respect to all Receivables and records of all payments
received and all credits granted on the Receivables, all merchandise returned and all other
dealings therewith;

          (ii) it shall mark conspicuously, in form and manner reasonably satisfactory to the
Collateral Agent, all Chattel Paper, Instruments and other evidence of Receivables (other
than any delivered to the Collateral Agent as provided herein), as well as the Receivables
Records with an appropriate reference to the fact that the Collateral Agent has a security
interest therein;

          (iii) it shall perform in all material respects all of its obligations with respect to
the Receivables;

          (iv) it shall not amend, modify, terminate or waive any provision of any Receivable (in
excess of $250,000 individually or $1,000,000 in the aggregate with other Receivables) in
any manner which could reasonably be expected to have a material adverse effect on the value
of such Receivable as Collateral. Other than in the ordinary course of business as
generally conducted by it on and prior to the date hereof, and except as otherwise provided
in subsection (v) below, following an Event of Default, such Grantor shall not (w) grant any
extension or renewal of the time of payment of any Receivable, (x) compromise or settle any
dispute, claim or legal proceeding with respect to any Receivable for less than the total
unpaid balance thereof, (y) release, wholly or partially, any Person liable for the payment
thereof, or (z) allow any credit or discount thereon;

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          (v) except as otherwise provided in this subsection, each Grantor shall continue to
collect all amounts due or to become due to such Grantor under the Receivables and any
Supporting Obligation and diligently exercise each material right it may have under any
Receivable, any Supporting Obligation or Collateral Support, in each case, at its own
expense, and in connection with such collections and exercise, such Grantor shall take such
action as such Grantor or the Collateral Agent may deem necessary or advisable.
Notwithstanding the foregoing, upon the occurrence and during the continuation of any Event
of Default, the Collateral Agent shall have the right at any time to notify, or require any
Grantor to notify, any Account Debtor of the Collateral Agent’s security interest in the
Receivables and any Supporting Obligation and, in addition, at any time following the
occurrence and during the continuation of an Event of Default, the Collateral Agent may:
(1) direct the Account Debtors under any Receivables to make payment of all amounts due or
to become due to such Grantor thereunder directly to the Collateral Agent; (2) notify, or
require any Grantor to notify, each Person maintaining a lockbox or similar arrangement to
which Account Debtors under any Receivables have been directed to make payment to remit all
amounts representing collections on checks and other payment items from time to time sent to
or deposited in such lockbox or other arrangement directly to the Collateral Agent; and (3)
enforce, at the expense of such Grantor, collection of any such Receivables and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. If the Collateral Agent notifies any Grantor that
it has elected to collect the Receivables in accordance with the preceding sentence, any
payments of Receivables received by such Grantor shall be forthwith (and in any event within
two (2) Business Days) deposited by such Grantor in the exact form received, duly indorsed
by such Grantor to the Collateral Agent if required, in the Collateral Account maintained
under the sole dominion and control of the Collateral Agent, and until so turned over, all
amounts and proceeds (including checks and other instruments) received by such Grantor in
respect of the Receivables, any Supporting Obligation or Collateral Support shall be
received in trust for the benefit of the Collateral Agent hereunder and shall be segregated
from other funds of such Grantor and such Grantor shall not adjust, settle or compromise the
amount or payment of any Receivable, or release wholly or partly any Account Debtor or
obligor thereof, or allow any credit or discount thereon; and

          (vi) it shall use its best efforts to keep in full force and effect any Supporting
Obligation or Collateral Support relating to any Receivable.

          (c) Delivery and Control of Receivables. With respect to any Receivables in excess of
$25,000 individually or $100,000 in the aggregate that is evidenced by, or constitutes, Chattel
Paper or Instruments, each Grantor shall, upon the request of the Collateral Agent, cause each
originally executed copy thereof to be delivered to the Collateral Agent (or its agent or designee)
appropriately indorsed to the Collateral Agent or indorsed in blank: (i) with respect to any such
Receivables in existence on the date hereof, on or prior to the date hereof and (ii) with respect
to any such Receivables hereafter arising, within ten (10) days of such Grantor acquiring rights
therein. With respect to any Receivables in excess of $25,000 individually or $100,000 in the
aggregate which would constitute “electronic chattel paper” under Article 9 of the UCC, each
Grantor shall, upon the request of the Collateral Agent, take all steps necessary to give the
Collateral Agent control over such Receivables (within the meaning of Section 9-105 of the

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UCC): (i) with respect to any such Receivables in existence on the date hereof, on or prior
to the date hereof and (ii) with respect to any such Receivables hereafter arising, within ten (10)
days of such Grantor acquiring rights therein. Any Receivable not otherwise required to be
delivered or subjected to the control of the Collateral Agent in accordance with this subsection
(c) shall be delivered or subjected to such control upon request of the Collateral Agent.

     4.4 Investment Related Property.

          4.4.1 Investment Related Property Generally

          (a) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

          (i) in the event it acquires rights in any Investment Related Property after the date
hereof, it shall deliver to the Collateral Agent a completed Pledge Supplement,
substantially in the form of Exhibit A attached hereto, together with all Supplements to
Schedules thereto, reflecting such new Investment Related Property and all other Investment
Related Property. Notwithstanding the foregoing, it is understood and agreed that the
security interest of the Collateral Agent shall attach to all Investment Related Property
immediately upon any Grantor’s acquisition of rights therein and shall not be affected by
the failure of any Grantor to deliver a supplement to Schedule 4.4 as required hereby;

          (ii) except as provided in the next sentence, in the event such Grantor receives any
dividends, interest or distributions on any Investment Related Property, or any securities
or other property upon the merger, consolidation, liquidation or dissolution of any issuer
of any Investment Related Property, then (a) such dividends, interest or distributions and
securities or other property shall be included in the definition of Collateral without
further action and (b) such Grantor shall immediately take all steps, if any, necessary or
advisable to ensure the validity, perfection, priority and, if applicable, control of the
Collateral Agent over such Investment Related Property (including, without limitation,
delivery thereof to the Collateral Agent) and pending any such action such Grantor shall be
deemed to hold such dividends, interest, distributions, securities or other property in
trust for the benefit of the Collateral Agent and shall segregate such dividends,
distributions, Securities or other property from all other property of such Grantor.
Notwithstanding the foregoing, so long as no Event of Default shall have occurred and be
continuing, the Collateral Agent authorizes each Grantor to retain and use to the extent
remitted under the Credit Documents, all ordinary cash dividends and distributions paid in
the normal course of the business of the issuer and consistent with the past practice of the
issuer and all scheduled payments of interest;

          (iii) each Grantor consents to the grant by each other Grantor of a Security Interest
in all Investment Related Property to the Collateral Agent.

          (b) Delivery and Control.

          (i) Each Grantor agrees that with respect to any Investment Related Property in which
it currently has rights it shall comply with the provisions of this

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Section 4.4.1(b) on or before the Effective Date and with respect to any Investment
Related Property hereafter acquired by such Grantor it shall comply with the provisions of
this Section 4.4.1(b) immediately upon acquiring rights therein, in each case in form and
substance satisfactory to the Collateral Agent. With respect to any Investment Related
Property that is represented by a certificate or that is an “instrument” (other than any
Investment Related Property credited to a Securities Account) it shall cause such
certificate or instrument to be delivered to the Collateral Agent, indorsed in blank by an
“effective indorsement” (as defined in Section 8-107 of the UCC), regardless of whether such
certificate constitutes a “certificated security” for purposes of the UCC. With respect to
any Investment Related Property that is an “uncertificated security” for purposes of the UCC
(other than any “uncertificated securities” credited to a Securities Account), it shall
cause the issuer of such uncertificated security to either (i) register the Collateral Agent
as the registered owner thereof on the books and records of the issuer or (ii) execute an
agreement substantially in the form of Exhibit B hereto, pursuant to which such issuer
agrees to comply with the Collateral Agent’s instructions with respect to such
uncertificated security without further consent by such Grantor.

          (c) Voting and Distributions.

          (i) So long as no Event of Default shall have occurred and be continuing:

          (1) except as otherwise provided under the covenants and agreements relating to
Investment Related Property in this Agreement or elsewhere herein or in the Credit
Agreement, each Grantor shall be entitled to exercise or refrain from exercising any
and all voting and other consensual rights pertaining to the Investment Related
Property or any part thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Agreement; provided, no Grantor shall exercise or refrain
from exercising any such right if the Collateral Agent shall have notified such
Grantor that, in the Collateral Agent’s reasonable judgment, such action would have
a material adverse effect on the value of the Investment Related Property or any
part thereof; and provided further, such Grantor shall give the Collateral Agent at
least five (5) Business Days prior written notice of the manner in which it intends
to exercise, or the reasons for refraining from exercising, any such right; it being
understood, however, that neither the voting by such Grantor of any Pledged Stock
for, or such Grantor’s consent to, the election of directors (or similar governing
body) at a regularly scheduled annual or other meeting of stockholders or with
respect to incidental matters at any such meeting, nor such Grantor’s consent to or
approval of any action otherwise permitted under this Agreement and the Credit
Agreement, shall be deemed inconsistent with the terms of this Agreement or the
Credit Agreement within the meaning of this Section 4.4(c)(i)(1), and no notice of
any such voting or consent need be given to the Collateral Agent; and

          (2) the Collateral Agent shall promptly execute and deliver (or cause to be
executed and delivered) to each Grantor all proxies, and other instruments as such
Grantor may from time to time reasonably request for the

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purpose of enabling such Grantor to exercise the voting and other consensual
rights when and to the extent which it is entitled to exercise pursuant to clause
(1) above;

           (3) Upon the occurrence and during the continuation of an Event of Default:

      (A) all rights of each Grantor to exercise or refrain from
exercising the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant hereto shall cease and all
such rights shall thereupon become vested in the Collateral Agent who
shall thereupon have the sole right to exercise such voting and other
consensual rights; and

      (B) in order to permit the Collateral Agent to exercise the
voting and other consensual rights which it may be entitled to
exercise pursuant hereto and to receive all dividends and other
distributions which it may be entitled to receive hereunder: (1) each
Grantor shall promptly execute and deliver (or cause to be executed
and delivered) to the Collateral Agent all proxies, dividend payment
orders and other instruments as the Collateral Agent may from time to
time reasonably request and (2) each Grantor acknowledges that the
Collateral Agent may utilize the power of attorney set forth in
Section 6.1.

          4.4.2 Pledged Equity Interests

          (a) Representations and Warranties. Each Grantor hereby represents and warrants on
the Initial Closing Date and on the Second Closing Date (in each case, both immediately before and
immediately after giving effect to the Acquisition and the consummation of the transactions
contemplated by the Tender Offer) and on each Credit Date, that:

          (i) Schedule 4.4(A) (as such schedule may be amended or supplemented from time to time)
sets forth under the headings “Pledged Stock, “Pledged LLC Interests,” “Pledged Partnership
Interests” and “Pledged Trust Interests,” respectively, all of the Pledged Stock, Pledged
LLC Interests, Pledged Partnership Interests and Pledged Trust Interests owned by any
Grantor and such Pledged Equity Interests constitute the percentage of issued and
outstanding shares of stock, percentage of membership interests, percentage of partnership
interests or percentage of beneficial interest of the respective issuers thereof indicated
on such Schedule;

          (ii) except as set forth on Schedule 4.4(B), it has not acquired any equity interests
of another entity or substantially all the assets of another entity within the past five (5)
years;

          (iii) it is the record and beneficial owner of the Pledged Equity Interests free of all
Liens, rights or claims of other Persons other than Permitted Liens and there are no
outstanding warrants, options or other rights to purchase, or shareholder, voting

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trust or similar agreements outstanding with respect to, or property that is
convertible into, or that requires the issuance or sale of, any Pledged Equity Interests;

          (iv) without limiting the generality of Section 4.1(a)(v), no consent of any Person
including any other general or limited partner, any other member of a limited liability
company, any other shareholder or any other trust beneficiary is necessary or desirable in
connection with the creation, perfection or first priority status of the security interest
of the Collateral Agent in any Pledged Equity Interests or the exercise by the Collateral
Agent of the voting or other rights provided for in this Agreement or the exercise of
remedies in respect thereof;

          (v) none of the Pledged LLC Interests nor Pledged Partnership Interests are or
represent interests in issuers that: (a) are registered as investment companies or (b) are
dealt in or traded on securities exchanges or markets; and

          (vi) except as otherwise set forth on Schedule 4.4(C), all of the Pledged LLC Interests
and Pledged Partnership Interests are or represent interests in issuers that have opted to
be treated as securities under the uniform commercial code of any jurisdiction.

          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

          (i) without the prior written consent of the Collateral Agent, it shall not vote to
enable or take any other action to: (a) amend or terminate any partnership agreement,
limited liability company agreement, certificate of incorporation, by-laws or other
organizational documents in any way that materially changes the rights of such Grantor with
respect to any Investment Related Property or adversely affects the validity, perfection or
priority of the Collateral Agent’s security interest, (b) other than as permitted under the
Credit Agreement, permit any issuer of any Pledged Equity Interest controlled by a Grantor
to issue any additional stock, partnership interests, limited liability company interests or
other equity interests of any nature or to issue securities convertible into or granting the
right of purchase or exchange for any stock or other equity interest of any nature of such
issuer, (c) other than as permitted under the Credit Agreement, permit any issuer of any
Pledged Equity Interest controlled by a Grantor to dispose of all or a material portion of
their assets, (d) waive any default under or breach of any terms of organizational document
relating to the issuer of any Pledged Equity Interest controlled by a Grantor or the terms
of any Pledged Debt, or (e) cause any issuer of any Pledged Partnership Interests or Pledged
LLC Interests which are not securities (for purposes of the UCC) on the date hereof to elect
or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC
Interests to be treated as securities for purposes of the UCC; provided, however,
notwithstanding the foregoing, if any issuer of any Pledged Partnership Interests or Pledged
LLC Interests takes any such action in violation of the foregoing in this clause (e), such
Grantor shall promptly notify the Collateral Agent in writing of any such election or action
and, in such event, shall take all steps necessary or advisable to establish the Collateral
Agent’s “control” thereof;

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          (ii) it shall comply with all of its obligations under any partnership agreement or
limited liability company agreement relating to Pledged Partnership Interests or Pledged LLC
Interests and shall enforce all of its rights with respect to any Investment Related
Property;

          (iii) without the prior written consent of the Collateral Agent, it shall not permit
any issuer of any Pledged Equity Interest controlled by a Grantor to merge or consolidate
unless (i) such issuer creates a security interest that is perfected by a filed financing
statement (that is not effective solely under section 9-508 of the UCC) in collateral in
which such new debtor has or acquires rights, and (ii) all the outstanding capital stock or
other equity interests of the surviving or resulting corporation, limited liability company,
partnership or other entity is, upon such merger or consolidation, pledged hereunder and no
cash, securities or other property is distributed in respect of the outstanding equity
interests of any other constituent Grantor; provided that if the surviving or resulting
Person upon any such merger or consolidation involving an issuer which is a Controlled
Foreign Corporation, then such Grantor shall only be required to pledge equity interests in
accordance with Section 2.2;

          (iv) each Grantor consents to the grant by each other Grantor of a security interest in
all Investment Related Property to the Collateral Agent and, without limiting the foregoing,
consents to the transfer of any Pledged Partnership Interest and any Pledged LLC Interest to
the Collateral Agent or its nominee following an Event of Default and to the substitution of
the Collateral Agent or its nominee as a partner in any partnership or as a member in any
limited liability company with all the rights and powers related thereto; and

          (v) in addition to the foregoing, if any issuer of any Investment Related Property is
located in a jurisdiction outside of the United States, the applicable Grantor shall take
such additional actions, including, without limitation, causing the issuer to register the
pledge on its books and records or making such filings or recordings, in each case as may be
reasonably necessary or advisable, under the laws of such issuer’s jurisdiction to insure
the validity, perfection and priority of the security interest of the Collateral Agent.
Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent
shall have the right, without notice to any Grantor, to transfer all or any portion of the
Investment Related Property to its name or the name of its nominee or agent. In addition,
the Collateral Agent shall have the right at any time, without notice to any Grantor, to
exchange any certificates or instruments representing any Investment Related Property for
certificates or instruments of smaller or larger denominations.

          4.4.3 Pledged Debt

          (a) Representations and Warranties. Each Grantor hereby represents and warrants on
the Initial Closing Date and on the Second Closing Date (in each case, both immediately before and
immediately after giving effect to the Acquisition and the consummation of the transactions
contemplated by the Tender Offer) and on each Credit Date, that Schedule 4.4 (as such schedule may
be amended or supplemented from time to time) sets forth under the

22

 

heading “Pledged Debt” all of the Pledged Debt owned by any Grantor and all of such Pledged
Debt has been duly authorized, authenticated or issued, and delivered and is the legal, valid and
binding obligation of the issuers thereof and is not in default and constitutes all of the issued
and outstanding inter-company Indebtedness;

          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees that it shall
notify the Collateral Agent of any default under any Pledged Debt that has caused, either in any
individual case or in the aggregate, a Material Adverse Effect.

          4.4.4 Investment Accounts

          (a) Representations and Warranties. Each Grantor hereby represents and warrants on the
Initial Closing Date and on the Second Closing Date (in each case, both immediately before and
immediately after giving effect to the Acquisition and the consummation of the transactions
contemplated by the Tender Offer) and on each Credit Date, that:

          (b) Schedule 4.4 hereto (as such schedule may be amended or supplemented from time to time)
sets forth under the headings “Securities Accounts” and “Commodities Accounts,” respectively, all
of the Securities Accounts and Commodities Accounts in which each Grantor has an interest. Each
Grantor is the sole entitlement holder of each such Securities Account and Commodity Account, and
such Grantor has not consented to, and is not otherwise aware of, any Person (other than the
Collateral Agent pursuant hereto) having “control” (within the meanings of Sections 8-106 and 9-106
of the UCC) over, or any other interest in, any such Securities Account or Commodity Account or
securities or other property credited thereto;

          (i) Schedule 4.4 hereto (as such schedule may be amended or supplemented from time to
time) sets forth under the headings “Deposit Accounts” all of the Deposit Accounts in which
each Grantor has an interest. Each Grantor is the sole account holder of each such Deposit
Account and such Grantor has not consented to, and is not otherwise aware of, any Person
(other than the Collateral Agent pursuant hereto or the relevant depository bank) having
either sole dominion and control (within the meaning of common law) or “control” (within the
meanings of Section 9-104 of the UCC) over, or any other interest in, any such Deposit
Account or any money or other property deposited therein; and

          (ii) Each Grantor has taken all actions necessary or desirable, including those
specified in Section 4.4.4(c), to: (a) establish Collateral Agent’s “control” (within the
meanings of Sections 8-106 and 9-106 of the UCC) over any portion of the Investment Related
Property constituting Certificated Securities, Uncertificated Securities, Securities
Accounts, Securities Entitlements or Commodities Accounts (each as defined in the UCC); (b)
establish the Collateral Agent’s “control” (within the meaning of Section 9-104 of the UCC)
over all Deposit Accounts; and (c) deliver all Instruments to the Collateral Agent.

          (iii) Covenant and Agreement. Each Grantor hereby covenants and agrees with
the Collateral Agent and each other Secured Party that it shall not close or terminate any
Investment Account without the prior consent of the Collateral Agent and

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unless a successor or replacement account has been established with the consent of the
Collateral Agent with respect to which successor or replacement account a control agreement
has been entered into by the appropriate Grantor, Collateral Agent and securities
intermediary or depository institution at which such successor or replacement account is to
be maintained in accordance with the provisions of Section 4.4.4(c).

          (c) Delivery and Control

          (i) With respect to any Investment Related Property consisting of Securities Accounts
or Securities Entitlements, it shall cause the securities intermediary maintaining such
Securities Account or Securities Entitlement to enter into an agreement substantially in the
form of Exhibit C hereto pursuant to which it shall agree to comply with the Collateral
Agent’s “entitlement orders” without further consent by such Grantor. With respect to any
Investment Related Property that is a “Deposit Account,” it shall cause the depositary
institution maintaining such account to enter into an agreement substantially in the form of
Exhibit D hereto, pursuant to which the Collateral Agent shall have both dominion and
control over such Deposit Account (within the meaning of the common law) and “control”
(within the meaning of Section 9-104 of the UCC) over such Deposit Account (it being
understood that the relevant depository bank shall also have control). Each Grantor shall
have entered into such control agreement or agreements with respect to: (i) any Securities
Accounts, Securities Entitlements or Deposit Accounts that exist on the Credit Date, as of
or prior to the Credit Date and (ii) any Securities Accounts, Securities Entitlements or
Deposit Accounts that are created or acquired after the Credit Date, as of or prior to the
deposit or transfer of any such Securities Entitlements or funds, whether constituting
moneys or investments, into such Securities Accounts or Deposit Accounts.

     In addition to the foregoing, if any issuer of any Investment Related Property is
located in a jurisdiction outside of the United States, each Grantor shall take such
additional actions, including, without limitation, causing the issuer to register the pledge
on its books and records or making such filings or recordings, in each case as may be
necessary or advisable, under the laws of such issuer’s jurisdiction to insure the
validity, perfection and priority of the security interest of the Collateral Agent. Upon
the occurrence of an Event of Default, the Collateral Agent shall have the right, without
notice to any Grantor, to transfer all or any portion of the Investment Related Property to
its name or the name of its nominee or agent. In addition, the Collateral Agent shall have
the right at any time, without notice to any Grantor, to exchange any certificates or
instruments representing any Investment Related Property for certificates or instruments of
smaller or larger denominations.

     4.5 Material Contracts

          (a) Representations and Warranties. Each Grantor hereby represents and warrants on
the Initial Closing Date and on the Second Closing Date (in each case, both immediately before and
immediately after giving effect to the Acquisition and the consummation of the transactions
contemplated by the Tender Offer) and on each Credit Date, that:

24

 

          (i) Schedule 4.5 (as such schedule may be amended or supplemented from time to time)
sets forth all of the Material Contracts to which such Grantor has rights;

          (ii) the Material Contracts, true and complete copies (including any amendments or
supplements thereof) of which have been furnished to the Collateral Agent, have been duly
authorized, executed and delivered by all parties thereto, are in full force and effect and
are binding upon and enforceable against all parties thereto in accordance with their
respective terms. To the best knowledge of any Grantor, there exists no default under any
Material Contract by any party thereto and neither such Grantor, nor any other Person party
thereto is likely to become in default thereunder and no Person party thereto has any
defenses, counterclaims or right of set-off with respect to any Material Contract. Each
Person party to a Material Contract (other than any Grantor) has executed and delivered to
the applicable Grantor a consent to the assignment of such Material Contract to the
Collateral Agent pursuant to this Agreement; and

          (iii) no Material Contract prohibits assignment or requires consent of or notice to any
Person in connection with the assignment to the Collateral Agent hereunder, except such as
has been given or made or is currently sought pursuant to Section 4.5 (b)(vii) hereof.

          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

        (i) in addition to any rights under the Section of this Agreement relating to
Receivables, upon the occurrence and during the continuation of any Event of Default, the
Collateral Agent may at any time notify, or require any Grantor to so notify, the
counterparty on any Material Contract of the security interest of the Collateral Agent
therein. In addition, after the occurrence and during the continuance of an Event of
Default, the Collateral Agent may upon written notice to the applicable Grantor, notify, or
require any Grantor to notify, the counterparty to make all payments under the Material
Contracts directly to the Collateral Agent;

        (ii) each Grantor shall deliver promptly to the Collateral Agent a copy of each
material demand, notice or document received by it relating in any way to any Material
Contract;

        (iii) each Grantor shall deliver promptly to the Collateral Agent, and in any event
within ten (10) Business Days, after (1) any Material Contract of such Grantor is terminated
or amended in a manner that is materially adverse to such Grantor or (2) any new Material
Contract is entered into by such Grantor, a written statement describing such event, with
copies of such material amendments or new contracts, delivered to the Collateral Agent (to
the extent such delivery is permitted by the terms of any such Material Contract, provided,
no prohibition on delivery shall be effective if it were bargained for by such Grantor with
the intent of avoiding compliance with this Section 4.5(b)(iii)), and an explanation of any
actions being taken with respect thereto;

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          (iv) it shall perform in all material respects all of its obligations with respect to
the Material Contracts;

          (v) it shall promptly and diligently exercise each material right (except the right of
termination) it may have under any Material Contract, any Supporting Obligation or
Collateral Support, in each case, at its own expense, and in connection with such
collections and exercise, such Grantor shall take such action as such Grantor or the
Collateral Agent may deem necessary or advisable;

          (vi) it shall use its best efforts to keep in full force and effect any Supporting
Obligation or Collateral Support relating to any Material Contract; and

          (vii) each Grantor shall, within thirty (30) days of the date hereof with respect to
any Non-Assignable Contract in effect on the date hereof and within thirty (30) days after
entering into any Non-Assignable Contract after the Effective Date, request in writing the
consent of the counterparty or counterparties to the Non-Assignable Contract pursuant to the
terms of such Non-Assignable Contract or applicable law to the assignment or granting of a
security interest in such Non-Assignable Contract to Secured Party and use its best efforts
to obtain such consent as soon as practicable thereafter.

     4.6 Letter of Credit Rights

          (a) Representations and Warranties. Each Grantor hereby represents and warrants on
the Initial Closing Date and on the Second Closing Date (in each case, both immediately before and
immediately after giving effect to the Acquisition and the consummation of the transactions
contemplated by the Tender Offer) and on each Credit Date, that:

          (i) all material letters of credit to which such Grantor has rights are listed on
Schedule 4.6 (as such schedule may be amended or supplemented from time to time) hereto; and

          (ii) it has obtained the consent of each issuer of any material letter of credit to the
assignment of the proceeds of the letter of credit to the Collateral Agent.

          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees that with
respect to any material letter of credit hereafter arising it shall obtain the consent of the
issuer thereof to the assignment of the proceeds of the letter of credit to the Collateral Agent
and shall deliver to the Collateral Agent a completed Pledge Supplement, substantially in the form
of Exhibit A attached hereto, together with all Supplements to Schedules thereto.

     4.7 Intellectual Property.

          (a) Representations and Warranties. Except as disclosed in Schedule 4.7(H) (as such
schedule may be amended or supplemented from time to time), each Grantor hereby represents and
warrants on the Initial Closing Date and on the Second Closing Date (in each case, both immediately
before and immediately after giving effect to the Acquisition and the consummation of the
transactions contemplated by the Tender Offer), and on each Credit Date, that:

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          (i) Schedule 4.7 (as such schedule may be amended or supplemented from time to time)
sets forth a true and complete list of (i) all United States and foreign registrations of
and applications for Patents, Trademarks, and Copyrights owned by each Grantor, and (ii) all
Patent Licenses, Trademark Licenses, Trade Secret Licenses and Copyright Licenses material
to the business of such Grantor;

          (ii) it is the sole and exclusive owner of the entire right, title, and interest in and
to all Intellectual Property identified on Schedule 4.7 as belonging to it (as such schedule
may be amended or supplemented from time to time), and owns or has the valid right to use
all Intellectual Property material to or necessary to conduct its business, free and clear
of all Liens, claims, encumbrances and licenses, except for Permitted Liens and the licenses
set forth on Schedule 4.7(B), (D), (F) and (G) (as each may be amended or supplemented from
time to time);

          (iii) all Intellectual Property is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part, and each Grantor has performed all acts and has paid all
renewal, maintenance, and other fees and taxes required to maintain each and every
registration and application of Copyrights, Patents and Trademarks in full force and effect;

          (iv) all Intellectual Property is valid and enforceable; no holding, decision, or
judgment has been rendered in any action or proceeding before any court or administrative
authority challenging the validity of, such Grantor’s right to register, or such Grantor’s
rights to own or use, any Intellectual Property and no such action or proceeding is pending
or, to the best of such Grantor’s knowledge, threatened;

          (v) all registrations and applications for Copyrights, Patents and Trademarks are
standing in the name of each Grantor, to whom they are applicable, as identified on Schedule
4.7, and none of the Trademarks, Patents, Copyrights or Trade Secrets has been licensed by
any such Grantor to any Affiliate or third party, except as disclosed in Schedule 4.7(B),
(D), (F), or (G) (as each may be amended or supplemented from time to time);

          (vi) each Grantor has been using appropriate statutory notice of registration in
connection with its use of registered Trademarks, proper marking practices in connection
with the use of Patents, and appropriate notice of copyright in connection with the
publication of Copyrights material to the business of such Grantor;

          (vii) each Grantor uses adequate standards of quality in the manufacture, distribution,
and sale of all products sold and in the provision of all services rendered under or in
connection with all Trademark Collateral and has taken all action necessary to insure that
all licensees of the Trademark Collateral owned by such Grantor use such adequate standards
of quality;

          (viii) except as disclosed on Schedule 4.7, to the best knowledge of each Grantor, the
conduct of such Grantor’s business does not infringe upon or otherwise violate any
trademark, patent, copyright, trade secret or other intellectual property right

27

 

owned or controlled by a third party; no claim has been made that the use of any
Intellectual Property necessary to the conduct of any material portion of the business of
Grantor (or any of its respective licensees) violates the asserted rights of any third
party;

          (ix) except as disclosed on Schedule 4.7, to the best of each Grantor’s knowledge, no
third party is infringing upon or otherwise violating any rights in any Intellectual
Property owned or used by such Grantor, or any of its respective licensees, and no Grantor
has taken any action against any third party for such infringing;

          (x) no settlement or consents, covenants not to sue, nonassertion assurances, or
releases have been entered into by Grantor or to which Grantor is bound that adversely
affect Grantor’s rights to own or use any Intellectual Property; and

          (xi) each Grantor has not made a previous assignment, sale, transfer or agreement
constituting a present or future assignment, sale, transfer or agreement of any Intellectual
Property that has not been terminated or released other than a Permitted Lien. There is no
effective financing statement or other document or instrument now executed, or on file or
recorded in any public office, granting a security interest in or otherwise encumbering any
part of the Intellectual Property, other than in favor of the Collateral Agent or with
respect to a Permitted Lien.

          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees as follows:

          (i) it shall not do any act or omit to do any act whereby any of the Intellectual
Property which is material to the business of Grantor may lapse, or become irrevocably
abandoned, dedicated to the public, or unenforceable, or which would adversely affect the
validity, grant, or enforceability of the security interest granted therein;

          (ii) it shall not, with respect to any Trademarks which are material to the business of
any Grantor, cease the use of any of such Trademarks (except where, in the ordinary course
and in such Grantor’s reasonable business judgment, cessation of use of a Trademark is
appropriate or advisable) or fail to maintain the level of the quality of products sold and
services rendered under any of such Trademark at a level at least substantially consistent
with the quality of such products and services as of the date hereof, and each Grantor shall
take all steps necessary to insure that licensees of such Trademarks use such consistent
standards of quality;

          (iii) it shall, no later than thirty (30) days before it takes any action to enforce
its rights in or to any copyrightable work which is material to its business, apply to
register the applicable Copyright in the United States Copyright Office;

          (iv) it shall promptly notify the Collateral Agent if it knows or has reason to know
that any item of the Intellectual Property that is material to the business of any Grantor
may become (a) irrevocably abandoned or dedicated to the public or placed in the public
domain, (b) invalid or unenforceable, or (c) subject to any adverse determination or
development (including the institution of proceedings) in any action or

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proceeding in the United States Patent and Trademark Office, the United States
Copyright Office, any state registry, any foreign counterpart of the foregoing, or any
court; provided, however, that the foregoing subsection (c) shall not apply to rejections of
claims given by the United States Patent and Trademark Office, the United States Copyright
Office, or any of their foreign counterparts during the ordinary course of a patent or
trademark prosecution or copyright registration;

          (v) it shall take all reasonable steps in the United States Patent and Trademark
Office, the United States Copyright Office, any state registry or any foreign counterpart of
the foregoing, to pursue any application and maintain any registration of each Trademark,
Patent, and Copyright owned by any Grantor and material to its business which is now or
shall become included in the Intellectual Property including, but not limited to, those
items on Schedule 4.7(A), (C) and (E) (as each may be amended or supplemented from time to
time);

          (vi) in the event that any Intellectual Property owned by or exclusively licensed to
any Grantor is infringed, misappropriated, or diluted by a third party, such Grantor shall
promptly take all reasonable actions to stop such infringement, misappropriation, or
dilution and protect its rights in such Intellectual Property including, but not limited to,
the initiation of a suit for injunctive relief and to recover damages;

          (vii) it shall, no less often than quarterly, report to the Collateral Agent (i) the
filing of any application to register any Intellectual Property with the United States
Patent and Trademark Office, the United States Copyright Office, or any state registry or
foreign counterpart of the foregoing (whether such application is filed by such Grantor or
through any agent, employee, licensee, or designee thereof) and (ii) the registration of any
Intellectual Property by any such office, in each case by executing and delivering to the
Collateral Agent a completed Pledge Supplement, substantially in the form of Exhibit A
attached hereto, together with all Supplements to Schedules thereto;

          (viii) (A) it shall, promptly upon the reasonable request of the Collateral Agent,
execute and deliver to the Collateral Agent any document (including, without limitation,
agreements in the form of Exhibits E, F and G) required to acknowledge, confirm, register,
record, maintain, continue, enforce, protect or perfect the Collateral Agent’s interest in
any part of the Intellectual Property, whether now owned or hereafter acquired, subject to
clause (B) of this paragraph in connection with the foreign Intellectual Property; and (B)
without limiting the foregoing:

          (ix) it shall execute and deliver to the Collateral Agent, within 30 days of the
Initial Closing Date (or such later date as the Collateral Agent, in its reasonable
discretion taking into consideration the good faith best efforts of such Grantor, may
consent), a security agreement or similar instrument governed by the laws of jurisdictions
of material, foreign Intellectual Property, respectively, pursuant to which the Grantor
shall have granted to the Collateral Agent a perfected security interest in its interests in
the trademarks registered in such jurisdictions, each such security agreement or similar
instrument to be in form and substance reasonably satisfactory to the Collateral Agent;

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          (x) except with the prior consent of the Collateral Agent or as permitted under the
Credit Agreement, each Grantor shall not execute, and there will not be on file in any
public office, any financing statement or other document or instruments, except financing
statements or other documents or instruments filed or to be filed in favor of the Collateral
Agent and each Grantor shall not sell, assign, transfer, license, grant any option, or
create or suffer to exist any Lien upon or with respect to the Intellectual Property, except
for the Lien created by and under this Agreement and the other Credit Documents;

          (xi) it shall hereafter use best efforts so as not to permit the inclusion in any
contract to which it hereafter becomes a party of any provision that could or might in any
way materially impair or prevent the creation of a security interest in, or the assignment
of, such Grantor’s rights and interests in any property included within the definitions of
any Intellectual Property acquired under such contracts;

          (xii) it shall take all steps reasonably necessary to protect the secrecy of all Trade
Secrets, including, without limitation, by entering into employment agreements containing
confidentiality provisions with those employees and customarily subject to employment
agreements, and by labeling and restricting access to secret information and documents;

          (xiii) it shall use proper statutory notice of registration in connection with its use
of registered Trademarks, proper marking practices in connection with the use of Patents,
and appropriate notice of copyright in connection with the publication of Copyrights, in
each case to the extent the same are material to the business of such Grantor; and

          (xiv) it shall continue to collect, at its own expense, all amounts due or to become
due to such Grantor in respect of the Intellectual Property or any portion thereof. In
connection with such collections, each Grantor may take (and, at the Collateral Agent’s
reasonable direction, shall take) such action as such Grantor or the Collateral Agent may
deem reasonably necessary or advisable to enforce collection of such amounts.
Notwithstanding the foregoing, the Collateral Agent shall have the right at any time, to
notify, or require any Grantor to notify, any obligors with respect to any such amounts of
the existence of the security interest created hereby.

     4.8 Commercial Tort Claims

          (a) Representations and Warranties. Each Grantor hereby represents and warrants, on
the Initial Closing Date and on the Second Closing Date (in each case, both immediately before and
immediately after giving effect to the Acquisition and the consummation of the transactions
contemplated by the Tender Offer) and on each Credit Date, that Schedule 4.8 (as such schedule may
be amended or supplemented from time to time) sets forth all Commercial Tort Claims of each Grantor
in excess of $25,000; and

          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees that with
respect to any Commercial Tort Claim in excess of $25,000 hereafter arising it shall

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deliver to the Collateral Agent a completed Pledge
Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules thereto, identifying such new
Commercial Tort Claims.

			
	SECTION 5. ACCESS;	 RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL GRANTORS.

     5.1 Access; Right of Inspection. The Collateral Agent shall at all times have full and free
access during normal business hours to all the books, correspondence and records of each Grantor,
and the Collateral Agent and its representatives may examine the same, take extracts therefrom and
make photocopies thereof, and each Grantor agrees to render to the Collateral Agent, at such
Grantor’s cost and expense, such clerical and other assistance as may be reasonably requested with
regard thereto. The Collateral Agent and its representatives shall at all times also have the
right to enter any premises of each Grantor and inspect any property of each Grantor where any of
the Collateral of such Grantor granted pursuant to this Agreement is located for the purpose of
inspecting the same, observing its use or otherwise protecting its interests therein.

     5.2 Further Assurances.

          (a) Each Grantor agrees that from time to time, at the expense of such Grantor, that it shall
promptly execute and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Collateral Agent may reasonably request, in order
to create and/or maintain the validity, perfection or priority of and protect any security interest
granted hereby or to enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the foregoing, each
Grantor shall:

          (i) file such financing or continuation statements, or amendments thereto, and execute
and deliver such other agreements, instruments, endorsements, powers of attorney or notices,
as may be necessary or desirable, or as the Collateral Agent may reasonably request, in
order to perfect and preserve the security interests granted or purported to be granted
hereby;

          (ii) take all actions necessary to ensure the recordation of appropriate evidence of
the liens and security interest granted hereunder in the Intellectual Property with any
intellectual property registry in which said Intellectual Property is registered or in which
an application for registration is pending including, without limitation, the United States
Patent and Trademark Office, the United States Copyright Office, the various Secretaries of
State, and the foreign counterparts on any of the foregoing;

          (iii) at any reasonable time, upon request by the Collateral Agent, assemble the
Collateral and allow inspection of the Collateral by the Collateral Agent, or persons
designated by the Collateral Agent; and

          (iv) at the Collateral Agent’s request, appear in and defend any action or proceeding
that may affect such Grantor’s title to or the Collateral Agent’s security interest in all
or any part of the Collateral.

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          (b) Each Grantor hereby authorizes the Collateral Agent to file a Record or Records,
including, without limitation, financing or continuation statements, and amendments thereto, in any
jurisdictions and with any filing offices as the Collateral Agent may determine, in its sole
discretion, are necessary or advisable to perfect the security interest granted to the Collateral
Agent herein. Such financing statements may describe the Collateral in the same manner as
described herein or may contain an indication or description of collateral that describes such
property in any other manner as the Collateral Agent may determine, in its sole discretion, is
necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral
granted to the Collateral Agent herein, including, without limitation, describing such property as
“all assets” or “all personal property, whether now owned or hereafter acquired.” Each Grantor
shall furnish to the Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection with the Collateral
as the Collateral Agent may reasonably request, all in reasonable detail.

          (c) Each Grantor hereby authorizes the Collateral Agent to modify this Agreement after
obtaining such Grantor’s approval of or signature to such modification by amending Schedule 4.7 (as
such schedule may be amended or supplemented from time to time) to include reference to any right,
title or interest in any existing Intellectual Property or any Intellectual Property acquired or
developed by any Grantor after the execution hereof or to delete any reference to any right, title
or interest in any Intellectual Property in which any Grantor no longer has or claims any right,
title or interest.

     5.3 Additional Grantors. From time to time subsequent to the date hereof, additional Persons
may become parties hereto as additional Grantors (each, an “Additional Grantor”), by executing a
Counterpart Agreement. Upon delivery of any such counterpart agreement to the Collateral Agent,
notice of which is hereby waived by Grantors, each Additional Grantor shall be a Grantor and shall
be as fully a party hereto as if such Additional Grantor were an original signatory hereto. Each
Grantor expressly agrees that its obligations arising hereunder shall not be affected or diminished
by the addition or release of any other Grantor hereunder, nor by any election of Collateral Agent
not to cause any Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto regardless of whether
any other Person becomes or fails to become or ceases to be a Grantor hereunder.

SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.

     6.1 Power of Attorney. Each Grantor hereby irrevocably appoints the Collateral Agent (such
appointment being coupled with an interest) as such Grantor’s attorney-in-fact, with full authority
in the place and stead of such Grantor and in the name of such Grantor, the Collateral Agent or
otherwise, from time to time in the Collateral Agent’s discretion to take any action and to execute
any instrument that the Collateral Agent may deem reasonably necessary or advisable to accomplish
the purposes of this Agreement, including, without limitation, the following:

          (a) upon the occurrence and during the continuance of any Event of Default, to obtain and
adjust insurance required to be maintained by such Grantor or paid to the Collateral Agent pursuant
to the Credit Agreement;

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          (b) upon the occurrence and during the continuance of any Event of Default, to ask for,
demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the Collateral;

          (c) upon the occurrence and during the continuance of any Event of Default, to receive,
endorse and collect any drafts or other instruments, documents and chattel paper in connection with
clause (b) above;

          (d) upon the occurrence and during the continuance of any Event of Default, to file any claims
or take any action or institute any proceedings that the Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral;

          (e) to prepare and file any UCC financing statements against such Grantor as debtor;

          (f) to prepare, sign, and file for recordation in any intellectual property registry,
appropriate evidence of the lien and security interest granted herein in the Intellectual Property
in the name of such Grantor as debtor;

          (g) to take or cause to be taken all actions necessary to perform or comply or cause
performance or compliance with the terms of this Agreement, including, without limitation, access
to pay or discharge taxes or Liens (other than Permitted Liens) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts necessary to discharge the
same to be determined by the Collateral Agent in its sole discretion, any such payments made by the
Collateral Agent to become obligations of such Grantor to the Collateral Agent, due and payable
immediately without demand;

          (h) upon the occurrence and during the continuation of any Event of Default, generally to
sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof
for all purposes subject to the compliance with all other provisions hereof; and

          (i) to do, at the Collateral Agent’s option and such Grantor’s expense, at any time or from
time to time, all acts and things that the Collateral Agent deems reasonably necessary to protect,
preserve or realize upon the Collateral and the Collateral Agent’s security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as such Grantor might
do.

     6.2 No Duty on the Part of Collateral Agent or Secured Parties. The powers conferred on the
Collateral Agent hereunder are solely to protect the interests of the Secured Parties in the
Collateral and shall not impose any duty upon the Collateral Agent or any Secured Party to exercise
any such powers. The Collateral Agent and the Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers, and neither they nor
any of their officers, directors, employees or agents shall be responsible to any Grantor for any
act or failure to act hereunder, except for their own gross negligence or willful misconduct.

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SECTION 7. REMEDIES.

     7.1 Generally.

          (a) If any Event of Default shall have occurred and be continuing, the Collateral Agent may
exercise in respect of the Collateral, in addition to all other rights and remedies provided for
herein or otherwise available to it at law or in equity, all the rights and remedies of the
Collateral Agent on default under the UCC (whether or not the UCC applies to the affected
Collateral) to collect, enforce or satisfy any Secured Obligations then owing, whether by
acceleration or otherwise, and also may pursue any of the following separately, successively or
simultaneously:

          (i) require any Grantor to, and each Grantor hereby agrees that it shall at its expense
and promptly upon request of the Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Collateral Agent and make it available to the Collateral Agent
at a place to be designated by the Collateral Agent that is reasonably convenient to both
parties;

          (ii) enter onto the property where any Collateral is located and take possession
thereof with or without judicial process;

          (iii) prior to the disposition of any Collateral, store, process, repair or recondition
such Collateral or otherwise prepare the Collateral for disposition in any manner to the
extent the Collateral Agent deems appropriate; and

          (iv) without notice except as specified below or under the UCC, sell, assign, lease,
license (on an exclusive or nonexclusive basis) or otherwise dispose of the Collateral or
any part thereof in one or more parcels at public or private sale, at any of the Collateral
Agent’s offices or elsewhere, for cash, on credit or for future delivery, at such time or
times and at such price or prices and upon such other terms as the Collateral Agent may deem
commercially reasonable.

          (b) The Collateral Agent or any Secured Party may be the purchaser of any or all of the
Collateral at any public or private (to the extent the portion of the Collateral being privately
sold is of a kind that is customarily sold on a recognized market or the subject of widely
distributed standard price quotations) sale in accordance with the UCC and the Collateral Agent, as
collateral agent for and representative of the Secured Parties, shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such sale made in accordance with the UCC, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any Collateral payable by the
Collateral Agent at such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by applicable law) all rights of redemption, stay and/or appraisal which
it now has or may at any time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by
law, at least ten (10) days notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable notification.

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The Collateral Agent shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each Grantor agrees
that it would not be commercially unreasonable for the Collateral Agent to dispose of the
Collateral or any portion thereof by using Internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capability of doing so, or that
match buyers and sellers of assets. Each Grantor hereby waives any claims against the Collateral
Agent arising by reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a public sale, even
if the Collateral Agent accepts the first offer received and does not offer such Collateral to more
than one offeree. If the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantors shall be liable for the deficiency and
the fees of any attorneys employed by the Collateral Agent to collect such deficiency. Each
Grantor further agrees that a breach of any of the covenants contained in this Section will cause
irreparable injury to the Collateral Agent, that the Collateral Agent has no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against such Grantor, and such Grantor hereby waives and
agrees not to assert any defenses against an action for specific performance of such covenants
except for a defense that no default has occurred giving rise to the Secured Obligations becoming
due and payable prior to their stated maturities. Nothing in this Section shall in any way alter
the rights of the Collateral Agent hereunder.

          (c) The Collateral Agent may sell the Collateral without giving any warranties as to the
Collateral. The Collateral Agent may specifically disclaim or modify any warranties of title or
the like. This procedure will not be considered to adversely affect the commercial reasonableness
of any sale of the Collateral.

          (d) The Collateral Agent shall have no obligation to marshal any of the Collateral.

     7.2 Application of Proceeds. Except as expressly provided elsewhere in this Agreement, all
proceeds received by the Collateral Agent in respect of any sale, any collection from, or other
realization upon all or any part of the Collateral shall be applied in full or in part by the
Collateral Agent against the Secured Obligations in the following order of priority: first, to the
payment of all costs and expenses of such sale, collection or other realization, including
reasonable compensation to the Collateral Agent and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by the Collateral Agent in connection therewith, and all
amounts for which the Collateral Agent is entitled to indemnification hereunder (in its capacity as
the Collateral Agent and not as a Lender) and all advances made by the Collateral Agent hereunder
for the account of the applicable Grantor, and to the payment of all costs and expenses paid or
incurred by the Collateral Agent in connection with the exercise of any right or remedy hereunder
or under the Credit Agreement, all in accordance with the terms hereof or thereof; second, to the
extent of any excess of such proceeds, to the payment of all other Secured Obligations for the
ratable benefit of the Lenders and the Lender Counterparties; and third, to the extent of any
excess of such proceeds, to the payment to or upon the order of

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such Grantor or to whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.

     7.3 Sales on Credit. If Collateral Agent sells any of the Collateral upon credit, Grantor
will be credited only with payments actually made by purchaser and received by Collateral Agent and
applied to indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, Collateral Agent may resell the Collateral and Grantor shall be credited with proceeds
of the sale.

     7.4 Deposit Accounts. If any Event of Default shall have occurred and be continuing, the
Collateral Agent may apply the balance from any Deposit Account or instruct the bank at which any
Deposit Account is maintained to pay the balance of any Deposit Account to or for the benefit of
the Collateral Agent.

     7.5 Investment Related Property. Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state securities laws, the Collateral
Agent may be compelled, with respect to any sale of all or any part of the Investment Related
Property conducted without prior registration or qualification of such Investment Related Property
under the Securities Act and/or such state securities laws, to limit purchasers to those who will
agree, among other things, to acquire the Investment Related Property for their own account, for
investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges
that any such sale may be at prices and on terms less favorable than those obtainable through a
public sale without such restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances, each Grantor agrees
that any such private sale shall be deemed to have been made in a commercially reasonable manner
and that the Collateral Agent shall have no obligation to engage in public sales and no obligation
to delay the sale of any Investment Related Property for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring registration under the Securities
Act or under applicable state securities laws, even if such issuer would, or should, agree to so
register it. If the Collateral Agent determines to exercise its right to sell any or all of the
Investment Related Property, upon written request, each Grantor shall and shall cause each issuer
of any Pledged Stock to be sold hereunder, each partnership and each limited liability company from
time to time to furnish to the Collateral Agent all such information as the Collateral Agent may
request in order to determine the number and nature of interest, shares or other instruments
included in the Investment Related Property which may be sold by the Collateral Agent in exempt
transactions under the Securities Act and the rules and regulations of the Securities and Exchange
Commission thereunder, as the same are from time to time in effect.

     7.6 Intellectual Property.

          (a) Anything contained herein to the contrary notwithstanding, upon the occurrence and during
the continuation of an Event of Default:

          (i) the Collateral Agent shall have the right (but not the obligation) to bring suit or
otherwise commence any action or proceeding in the name of any Grantor, the Collateral Agent
or otherwise, in the Collateral Agent’s sole discretion, to enforce any

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Intellectual Property, in which event such Grantor shall, at the request of the
Collateral Agent, do any and all lawful acts and execute any and all documents required by
the Collateral Agent in aid of such enforcement and such Grantor shall promptly, upon
demand, reimburse and indemnify the Collateral Agent as provided in Section 10 hereof in
connection with the exercise of its rights under this Section, and, to the extent that the
Collateral Agent shall elect not to bring suit to enforce any Intellectual Property as
provided in this Section, each Grantor agrees to use all reasonable measures, whether by
action, suit, proceeding or otherwise, to prevent the infringement or other violation of any
of such Grantor’s rights in the Intellectual Property by others;

          (ii) upon written demand from the Collateral Agent, each Grantor shall grant, assign,
convey or otherwise transfer to the Collateral Agent or such Collateral Agent’s designee all
of such Grantor’s right, title and interest in and to the Intellectual Property and shall
execute and deliver to the Collateral Agent such documents as are necessary or appropriate
to carry out the intent and purposes of this Agreement;

          (iii) each Grantor agrees that such an assignment and/or recording shall be applied to
reduce the Secured Obligations outstanding only to the extent that the Collateral Agent (or
any Secured Party) receives cash proceeds in respect of the sale of, or other realization
upon, the Intellectual Property;

          (iv) within five (5) Business Days after written notice from the Collateral Agent, each
Grantor shall make available to the Collateral Agent, to the extent within such Grantor’s
power and authority, such personnel in such Grantor’s employ on the date of such Event of
Default as the Collateral Agent may reasonably designate, by name, title or job
responsibility, to permit such Grantor to continue, directly or indirectly, to produce,
advertise and sell the products and services sold or delivered by such Grantor under or in
connection with the Trademarks and Trademark Licenses, such persons to be available to
perform their prior functions on the Collateral Agent’s behalf and to be compensated by the
Collateral Agent at such Grantor’s expense on a per diem, pro-rata basis consistent with the
salary and benefit structure applicable to each as of the date of such Event of Default; and

          (v) the Collateral Agent shall have the right to notify, or require each Grantor to
notify, any obligors with respect to amounts due or to become due to such Grantor in respect
of the Intellectual Property, of the existence of the security interest created herein, to
direct such obligors to make payment of all such amounts directly to the Collateral Agent,
and, upon such notification and at the expense of such Grantor, to enforce collection of any
such amounts and to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done;

          (1) all amounts and proceeds (including checks and other instruments) received
by Grantor in respect of amounts due to such Grantor in respect of the Collateral or
any portion thereof shall be received in trust for the benefit of the Collateral
Agent hereunder, shall be segregated from other funds of such Grantor and shall be
forthwith paid over or delivered to the Collateral Agent

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in the same form as so received (with any necessary endorsement) to be held as
cash Collateral and applied as provided by Section 7.7 hereof; and

          (2) Grantor shall not adjust, settle or compromise the amount or payment of any
such amount or release wholly or partly any obligor with respect thereto or allow
any credit or discount thereon.

          (b) If (i) an Event of Default shall have occurred and, by reason of cure, waiver,
modification, amendment or otherwise, no longer be continuing, (ii) no other Event of Default shall
have occurred and be continuing, (iii) an assignment or other transfer to the Collateral Agent of
any rights, title and interests in and to the Intellectual Property shall have been previously made
and shall have become absolute and effective, and (iv) the Secured Obligations shall not have
become immediately due and payable, upon the written request of any Grantor, the Collateral Agent
shall promptly execute and deliver to such Grantor, at such Grantor’s sole cost and expense, such
assignments or other instruments of transfer as may be necessary to reassign to such Grantor any
such rights, title and interests as may have been assigned to the Collateral Agent as aforesaid,
subject to any disposition thereof that may have been made by the Collateral Agent; provided, after
giving effect to such reassignment, the Collateral Agent’s security interest granted pursuant
hereto, as well as all other rights and remedies of the Collateral Agent granted hereunder, shall
continue to be in full force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of any other Liens granted by or on behalf of the Collateral
Agent and the Secured Parties.

          (c) Solely for the purpose of enabling the Collateral Agent to exercise rights and remedies
under this Section 7 and at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent, to the
extent it has the right to do so, an irrevocable, nonexclusive license (exercisable without payment
of royalty or other compensation to such Grantor), subject, in the case of Trademarks, to
sufficient rights to quality control and inspection in favor of such Grantor to avoid the risk of
invalidation of said Trademarks, to use, operate under, license, or sublicense any Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same may be located.

     7.7 Cash Proceeds. In addition to the rights of the Collateral Agent specified in Section 4.3
with respect to payments of Receivables, all proceeds of any Collateral received by any Grantor
consisting of cash, checks and other non-cash items (collectively, “Cash Proceeds”) shall be held
by such Grantor and used in accordance with the terms and provisions of the Credit Agreement, and,
upon the occurrence and during the continuation of any Event of Default, shall be held by such
Grantor in trust for the Collateral Agent, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, unless otherwise provided pursuant to Section 4.4.1(a)(ii),
be turned over to the Collateral Agent in the exact form received by such Grantor (duly indorsed by
such Grantor to the Collateral Agent, if required) and held by the Collateral Agent in the
Collateral Account. Any Cash Proceeds received by the Collateral Agent (whether from a Grantor or
otherwise): (i) if no Event of Default shall have occurred and be continuing, released to the
appropriate Grantor and used by such Grantor as otherwise provided by the terms and provisions of
the Credit Agreement, and (ii) if an Event of Default shall have occurred and be continuing, may,
in the sole discretion of the Collateral Agent, (A) be held by

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the Collateral Agent for the ratable benefit of the Secured Parties, as collateral security
for the Secured Obligations (whether matured or unmatured) and/or (B) then or at any time
thereafter may be applied by the Collateral Agent against the Secured Obligations then due and
owing.

SECTION 8. COLLATERAL AGENT.

     The Collateral Agent has been appointed to act as Collateral Agent hereunder by Lenders and,
by their acceptance of the benefits hereof, the other Secured Parties. The Collateral Agent shall
be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in accordance with this
Agreement and the Credit Documents; provided, the Collateral Agent shall, after payment in full of
all Obligations under the Credit Agreement and the other Credit Documents, exercise, or refrain
from exercising, any remedies provided for herein in accordance with the instructions of the
holders of a majority of the aggregate notional amount (or, with respect to any Hedge Agreement
that has been terminated in accordance with its terms, the amount then due and payable (exclusive
of expenses and similar payments but including any early termination payments then due) under such
Hedge Agreement) under all Hedge Agreements. In furtherance of the foregoing provisions of this
Section, each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no
right individually to realize upon any of the Collateral hereunder, it being understood and agreed
by such Secured Party that all rights and remedies hereunder may be exercised solely by the
Collateral Agent for the benefit of Secured Parties in accordance with the terms of this Section.
Collateral Agent may resign at any time by giving thirty (30) days’ prior written notice thereof to
Lenders and the Grantors, and Collateral Agent may be removed at any time with or without cause by
an instrument or concurrent instruments in writing delivered to the Grantors and Collateral Agent
signed by the Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five (5) Business Days’ notice to the Administrative
Agent, to appoint a successor Collateral Agent. Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, that successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges and duties of the
retiring or removed Collateral Agent under this Agreement, and the retiring or removed Collateral
Agent under this Agreement shall promptly (i) transfer to such successor Collateral Agent all sums,
Securities and other items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the duties of the
successor Collateral Agent under this Agreement, and (ii) execute and deliver to such successor
Collateral Agent or otherwise authorize the filing of such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in connection with the assignment to
such successor Collateral Agent of the security interests created hereunder, whereupon such
retiring or removed Collateral Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Collateral Agent’s resignation or removal hereunder as
the Collateral Agent, the provisions of this Agreement shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was the Collateral Agent
hereunder.

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SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.

     This Agreement shall create a continuing security interest in the Collateral and shall remain
in full force and effect until the payment in full of all Secured Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration of all outstanding Letters of
Credit, be binding upon each Grantor, its successors and assigns, and inure, together with the
rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent and
its successors, transferees and assigns. Without limiting the generality of the foregoing, but
subject to the terms of the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or otherwise. Upon the payment in full of
all Secured Obligations, the cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, the security interest granted hereby shall
automatically terminate hereunder and of record and all rights to the Collateral shall revert to
Grantors. Upon any such termination the Collateral Agent shall, at Grantors’ expense, execute and
deliver to Grantors or otherwise authorize the filing of such documents as Grantors shall
reasonably request, including financing statement amendments to evidence such termination. Upon
any disposition of property permitted by the Credit Agreement, the Liens granted herein shall be
deemed to be automatically released and such property shall automatically revert to the applicable
Grantor with no further action on the part of any Person. The Collateral Agent shall, at Grantors’
expense, execute and deliver or otherwise authorize the filing of such documents as Grantors shall
reasonably request, in form and substance reasonably satisfactory to the Collateral Agent,
including financing statement amendments to evidence such release.

SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.

     The powers conferred on the Collateral Agent hereunder are solely to protect its interest in
the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the
exercise of reasonable care in the custody of any Collateral in its possession and the accounting
for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its
own property. Neither the Collateral Agent nor any of its directors, officers, employees or agents
shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or otherwise. If any Grantor fails to perform any
agreement contained herein, the Collateral Agent may itself perform, or cause performance of, such
agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be
payable by each Grantor under Section 10.2 of the Credit Agreement.

SECTION 11. MISCELLANEOUS.

     Any notice required or permitted to be given under this Agreement shall be given in accordance
with Section 10.1 of the Credit Agreement. No failure or delay on the part of the Collateral Agent
in the exercise of any power, right or privilege hereunder or under any other Credit Document shall
impair such power, right or privilege or be construed to be a waiver of

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any default or acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any other power, right
or privilege. All rights and remedies existing under this Agreement and the other Credit Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise available. In case any
provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations,
or of such provision or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby. All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or would otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such action is taken or
condition exists. This Agreement shall be binding upon and inure to the benefit of the Collateral
Agent and Grantors and their respective successors and assigns. No Grantor shall, without the
prior written consent of the Collateral Agent given in accordance with the Credit Agreement, assign
any right, duty or obligation hereunder. This Agreement and the other Credit Documents embody the
entire agreement and understanding between Grantors and the Collateral Agent and supersede all
prior agreements and understandings between such parties relating to the subject matter hereof and
thereof. Accordingly, the Credit Documents may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties. This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to the same document.

     THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO ITS CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW
YORK GENERAL OBLIGATION LAWS).

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          IN WITNESS WHEREOF, each Grantor and the Collateral Agent have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly authorized as of the
date first written above.

	 	 	 	 	 
	 	 	GRANTORS:
	 
	 	 	 	 
	 	 	AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
	 	 	AMERICAN MEDICAL SYSTEMS, INC.
	 	 	AMS SALES CORPORATION
	 	 	AMS RESEARCH CORPORATION
	 	 	AMERICAN MEDICAL SYSTEMS GYNECOLOGY INC.
	 	 	THERMATRX INC.
	 	 	OVION, INC.
	 	 	SOLARANT MEDICAL, INC.
	 	 	KERMIT MERGER CORP.
	 
	 	 	 	 
	 

	 	By:
	 	  /s/ Carmen L. Diersen
	 

	 	 	 	 
	 

	 	 	 	Name: Carmen L. Diersen

Title: Executive Vice President, Chief

Financial Officer and Secretary

 

 

	 	 	 	 	 
	 	 	LASERSCOPE

LASERSCOPE INTERNATIONAL, INC.
INNOVAQUARTZ INCORPORATED
	 
	 	 	 	 
	 

	 	By:
	 	  /s/ Carmen L. Diersen
	 

	 	 	 	 
	 

	 	 	 	Name: Carmen L. Diersen

Title: Executive Vice President, Chief

Financial Officer and Secretary

 

 

	 	 	 	 	 
	 	 	CIT HEALTHCARE LLC,

as Collateral Agent
	 
	 	 	 	 
	 

	 	By:
	 	   /s/ Robert M. O’Mara
	 

	 	 	 	 
	 	 	Name: Robert M. O’Mara
	 	 	Title: Director

 

 

EXHIBIT A

TO PLEDGE AND SECURITY AGREEMENT

PLEDGE SUPPLEMENT

     This PLEDGE SUPPLEMENT,
dated ___, 20___ is delivered by [NAME OF GRANTOR], a [NAME OF
JURISDICTION OF FORMATION] (the “Grantor”) pursuant to the Pledge and Security Agreement dated as
of July ___, 2006 (as it may be from time to time amended, amended and restated, joined,
supplemented or otherwise modified from time to time, the “Security Agreement”), among AMERICAN
MEDICAL SYSTEMS, INC., a Delaware corporation, AMERICAN MEDICAL SYSTEMS HOLDINGS, INC., a Delaware
corporation, and the other Grantors named therein, and CIT HEALTHCARE LLC, as the collateral agent
for the Secured Parties (in such capacity, together with its successors and assigns in such
capacity, the “Collateral Agent”). Capitalized terms used herein not otherwise defined herein
shall have the meanings ascribed thereto in the Security Agreement.

     Grantor hereby confirms the grant to the Collateral Agent set forth in the Security Agreement
of, and does hereby grant to the Collateral Agent, a security interest in all of Grantor’s right,
title and interest in and to all Collateral to secure the Secured Obligations, in each case whether
now or hereafter existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located. Grantor represents and warrants that the attached Supplements to
Schedules accurately and completely set forth all additional information required pursuant to the
Security Agreement and hereby agrees that such Supplements to Schedules shall constitute part of
the Schedules to the Security Agreement.

     IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be duly executed and
delivered by its duly authorized officer as of ___, 20___

	 	 	 	 	 	 	 
	 	 	[NAME OF GRANTOR]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 	 	Name:
	 	 	Title:

EXHIBIT A-1exv10w3

 

	 	 	 	 	 	 
	This document was prepared by
	 	 	 	 	 
	and after recording, return to:
	 	 	 	 	 
	 
	 	 	 	 	 
	David P. DeYoe
	 	 	 	 	 
	McDermott Will & Emery LLP
	 	 	 	 	 
	227 West Monroe Street
	 	 	 	 	 
	Chicago, Illinois 60606
	 	 	 	 	 
	 
	 	 	 	 	 
	Permanent Tax Index Number:
	 	 	 	 	 
	 
	 	 	 	 	 
	                                        
	 	 	 	 	 
	 
	 	 	 	 	 
	Property Address:
	 	 	 	 	 
	 
	 	 	 	 	 
	10700 Bren Road West

	 	 	This space reserved for Recorders use only.	 	 
	 

	 	 	 	 	 
	Minnetonka, Minnesota 55343
	 	 	 	 	 

Notice: This instrument secures future advances under a revolving credit
facility, the priority of which date to the recording date hereof. This instrument
provides for variable rates of interest.

Notwithstanding Anything To The Contrary Herein, Enforcement Of This Mortgage In
Minnesota Is Limited To A Debt Amount Of $28,000,000 Under Chapter 287 Of Minnesota Statutes
(M.S. 287.05 Subd. 1(a))

MORTGAGE, SECURITY AGREEMENT,

ASSIGNMENT OF RENTS AND LEASES AND FIXTURE FINANCING STATEMENT

     This MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE FILING dated as
of July 20, 2006 (the “Mortgage”), is executed by AMERICAN MEDICAL SYSTEMS, INC., a
Delaware corporation (the “Mortgagor”), whose mailing address is 10700 Bren Road West,
Minnetonka, Minnesota 55343 to and for the benefit of CIT HEALTHCARE LLC (“CIT”), as administrative
agent and as collateral agent hereunder for the Lenders hereinafter identified and defined (CIT,
acting as such agent and any successor or successors to CIT in such capacity being hereinafter
referred to as “Mortgagee”), whose mailing address is 505 Fifth Avenue, New York, New York
10017.

RECITALS:

     A. That certain CREDIT AND GUARANTY AGREEMENT, dated as of July 20, 2006, is being
entered into contemporaneously herewith by and among MORTGAGOR, AMERICAN MEDICAL SYSTEMS HOLDINGS,
INC., a Delaware corporation, as a
Guarantor, CERTAIN SUBSIDIARIES OF HOLDINGS, as Guarantors, the Lenders from

 

 

time to time party
thereto, CIT CAPITAL SECURITIES LLC (“CIT Capital”), as Co-Lead Arranger and as Sole Bookrunner,
KEY BANC CAPITAL MARKETS, as Co-Lead Arranger and as Syndication Agent, CIT, as Administrative
Agent and as Collateral Agent, and JP MORGAN CHASE BANK N.A., as Issuing Bank.(such Credit and
Guaranty Agreement, as the same may from time to time be amended, modified or restated, being
hereinafter referred to as the “Credit Agreement”), pursuant to which CIT and other lenders
which from time to time become party to the Credit Agreement (all such lenders being hereinafter
referred to as the “Lenders” and individually as a “Lender”) have agreed, subject
to certain terms and conditions, to make available to the Borrower a revolving credit facility (the
“Revolving Credit”) with advances under the Revolving Credit to be evidenced by Revolving
Notes of the Borrower aggregating up to $115,000,000.00, and a term loan facility (the “Term
Loan”) to be evidenced by Term Notes of the Borrower aggregating $365,000,000.00, in each case
payable to the order of the respective Lender named thereon and maturing in no event later than
July 20, 2012 (the “Termination Date”), and bearing interest thereon at the rates and
payable at the times provided in the Credit Agreement (such promissory notes and any and all
promissory notes issued in renewal thereof or in substitution or replacement therefor being
hereinafter referred to collectively as the “Notes” and individually as a “Note”).

     B. Pursuant to the terms of the Credit Agreement, one or more Lenders may
from time to time issue letters of credit (the “Letters of Credit”) for the account of the
Mortgagor with expiry dates on or before the Termination Date in an aggregate face amount that
shall not at any one time exceed $5,000,000.00.

     C. Pursuant to the terms of the Credit Agreement, any Lender or Lenders may, from
time to time, assign to other Lenders portions of the indebtedness evidenced by the Notes then
owned by such assigning Lender together with an equivalent proportion of such assigning Lender’s
obligation to make advances under the Credit Agreement (each such assignment being hereinafter
referred to as an “Assignment”).

     D. In the event of each Assignment under the Credit Agreement, the Borrower have agreed to
execute and deliver to each new assignee Lender by reason of such Assignment new Notes evidencing
that portion of the indebtedness so assigned to such new assignee Lender and advances to be
thereafter made by such new assignee Lender pursuant to the Credit Agreement and to execute new
Notes to such assigning Lender evidencing the portion of such indebtedness not so assigned and
advances to be thereafter made by such assigning Lender pursuant to the Credit Agreement and it is
the intention of the parties that all such new Notes constitute “Notes” for purposes
hereof.

     E. One or more of the Borrower may from time to time enter into one or more interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements, interest rate hedging
agreements, interest rate futures agreements, interest rate exchange agreements, foreign currency
contracts, currency swap contracts or other similar interest rate or currency hedging arrangements
with one or more of the Lenders, or their affiliates, for the purpose of hedging or otherwise
protecting the Borrower against changes in interest rates and
currency exchange rates (the liability of the Borrower in respect of such agreements and
arrangements with such Lenders or affiliates being hereinafter referred to as the “Hedging
Liability”).

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     F. The Borrower may from time to time enter into one or more agreements or arrangements with
the Lenders, or their affiliates, relating to the execution or processing of electronic transfers
of funds by automatic clearing house transfer, wire transfer or otherwise to or from the deposit
accounts of the Borrower now or hereafter maintained with any of the Lenders or their affiliates,
the acceptance for deposit or the honoring for payment of any check, draft or other item with
respect to any such deposit accounts, and any other deposit, disbursement, and cash management
services afforded to the Mortgagor or any of its subsidiaries by any of such Lenders or their
affiliates (the liability of the Borrower in respect of agreements and arrangements with such
Lenders or affiliates being hereinafter referred to as “Funds Transfer and Deposit Account
Liability”).

     G. As a condition to extending credit to the Borrower under the Credit Agreement (such
transaction, the “Loan”), the Lenders have required, among other things, that Mortgagor
grant to Mortgagee a lien on and security interest in the real and personal property of Mortgagor
described herein subject to the terms and conditions hereof.

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

AGREEMENTS:

     The Mortgagor hereby mortgages, grants, assigns, remises, releases, warrants and conveys to
the Mortgagee, its successors and assigns, and grants a security interest in, the following
described property, rights and interests (referred to collectively herein as the
“Premises”), all of which property, rights and interests are hereby pledged primarily and
on a parity with the Real Estate (as defined below) and not secondarily:

     (a) The real estate located in the County of Hennepin, State of Minnesota and legally
described on Exhibit “A” attached hereto and made a part hereof (the “Real
Estate”);

     (b) All improvements of every nature whatsoever now or hereafter situated on the Real
Estate, and all fixtures and personal property of every nature whatsoever now or hereafter
owned by the Mortgagor and located on, or used in connection with the Real Estate or the
improvements thereon, or in connection with any construction thereon, including all
extensions, additions, improvements, betterments, renewals, substitutions and replacements
to any of the foregoing and all of the right, title and interest of the Mortgagor in and to
any such personal property or fixtures together with the benefit of any deposits or payments
now or hereafter made on such personal property or fixtures by the Mortgagor or on its
behalf (the “Improvements”);

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     (c) All easements, rights of way, gores of real estate, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers, and all estates,
rights, titles, interests, privileges, liberties, tenements, hereditaments and appurtenances
whatsoever, in any way now or hereafter belonging, relating or appertaining to the Real
Estate, and the reversions, remainders, rents, issues and profits thereof, and all the
estate, right, title, interest, property, possession, claim and demand whatsoever, at law as
well as in equity, of the Mortgagor of, in and to the same;

     (d) All rents, revenues, issues, profits, proceeds, income, royalties, Letter of Credit
Rights (as defined in the Uniform Commercial Code of the State in which the Premises are
located (the “Code”) in effect from time to time), escrows, security deposits,
impounds, reserves, tax refunds and other rights to monies from the Premises and/or the
businesses and operations conducted by the Mortgagor thereon, to be applied against the
Indebtedness (as hereinafter defined); provided, however, that the Mortgagor, so long as no
Event of Default (as hereinafter defined) has occurred hereunder, may collect and retain
rent as it becomes due (but not more than one (1) month in advance thereof), revenues,
issues, profits, proceeds, income, royalties, Letter of Credit Rights, escrows, security
deposits, impounds, reserves, tax refunds and other rights to monies from the Premises
and/or the businesses and operations conducted by the Mortgagor thereon;

     (e) All interest of the Mortgagor in all leases now or hereafter on the Premises,
whether written or oral (each, a “Lease”, and collectively, the “Leases”),
together with all security therefor and all monies payable thereunder, including, without
limitation, all rights and claims for damage against tenants arising out of defaults under
the Leases, including rights to termination fees and compensation with respect to rejected
Leases pursuant to Section 365(a) of the Federal Bankruptcy Code or any replacement Section
thereof, and all tenant improvements and fixtures located on the Premises, subject, however,
to the conditional permission hereinabove given to the Mortgagor to collect the rentals
under any such Lease;

     (f) All fixtures and articles of personal property now or hereafter owned by the
Mortgagor and forming a part of or used in connection with the Real Estate or the
Improvements, including, but without limitation, any and all air conditioners, antennae,
appliances, apparatus, awnings, basins, bathtubs, bidets, boilers, bookcases, cabinets,
carpets, computer hardware and software used in the operation of the Premises, coolers,
curtains, dehumidifiers, disposals, doors, drapes, dryers, ducts, dynamos, elevators,
engines, equipment, escalators, exercise equipment, fans, fittings, floor coverings,
furnaces, furnishings, furniture, hardware, heaters, humidifiers, incinerators, lighting,
machinery, motors, ovens, pipes, plumbing, pumps, radiators, ranges, recreational
facilities, refrigerators, screens, security systems, shades, shelving, sinks, sprinklers,
stokers, stoves, toilets, ventilators, wall coverings, washers, windows, window coverings,
wiring, and all renewals or replacements thereof or articles in substitution therefor,
whether or not the same are or shall be attached to the Real Estate or the Improvements in
any manner; it being mutually agreed that all of the aforesaid property owned by the
Mortgagor and placed on the Real Estate or the Improvements, so far as permitted by law,
shall be deemed to be fixtures, a part of the realty, and security for the
Indebtedness; notwithstanding the agreement hereinabove expressed that certain articles of
property form a part of the realty covered by this Mortgage and be appropriated to its use
and

4

 

deemed to be realty, to the extent that such agreement and declaration may not be
effective and that any of said articles may constitute Goods (as defined in the Code), this
instrument shall constitute a security agreement, creating a security interest in such
goods, as collateral, in the Mortgagee, as a Secured Party, and the Mortgagor, as Debtor,
all in accordance with the Code;

     (g) All of the Mortgagor’s interests in General Intangibles, including Payment
Intangibles and Software (each as defined in the Code) now owned or hereafter acquired and
related to the Premises, including, without limitation, all of the Mortgagor’s right, title
and interest in and to: (i) all agreements, licenses, permits and contracts to which the
Mortgagor is or may become a party and which relate to the Premises; (ii) all obligations
and indebtedness owed to the Mortgagor thereunder; (iii) all intellectual property related
to the Premises; and (iv) all choses in action and causes of action relating to the
Premises;

     (h) All of the Mortgagor’s accounts now owned or hereafter created or acquired as
relate to the Premises and/or the businesses and operations conducted thereon, including,
without limitation, all of the following now owned or hereafter created or acquired by the
Mortgagor: (i) Accounts (as defined in the Code), contract rights book debts, notes,
drafts, and other obligations or indebtedness owing to the Mortgagor arising from the sale,
lease or exchange of goods or other property and/or the performance of services; (ii) the
Mortgagor’s rights in, to and under all purchase orders for goods, services or other
property; (iii) the Mortgagor’s rights to any goods, services or other property represented
by any of the foregoing; (iv) monies due or to become due to the Mortgagor under all
contracts for the sale, lease or exchange of goods or other property and/or the performance
of services including the right to payment of any interest or finance charges in respect
thereto (whether or not yet earned by performance on the part of the Mortgagor); (v)
Securities, Investment Property, Financial Assets and Securities Entitlements (each as
defined in the Code); (vi) proceeds of any of the foregoing and all collateral security and
guaranties of any kind given by any person or entity with respect to any of the foregoing;
and (vii) all warranties, guarantees, permits and licenses in favor of the Mortgagor with
respect to the Premises; and

     (i) All proceeds of the foregoing, including, without limitation, all judgments, awards
of damages and settlements hereafter made resulting from condemnation proceeds or the taking
of the Premises or any portion thereof under the power of eminent domain, any proceeds of
any policies of insurance, maintained with respect to the Premises or proceeds of any sale,
option or contract to sell the Premises or any portion thereof.

     TO HAVE AND TO HOLD the Premises, unto the Mortgagee, its successors and assigns, forever, for
the purposes and upon the terms, provisions and conditions herein set forth.

     FOR THE PURPOSE OF SECURING (collectively, the “Indebtedness”): (i) the payment of
the principal and premium, if any, of and interest on the Notes as and when the same become due and
payable (whether by lapse of time, acceleration or otherwise) and all advances now or hereafter
made thereon, (ii) the payment of all sums due or owing with respect to the [Hedging Liability] and
the Funds Transfer and Deposit Account Liability, (iii) the payment and

5

 

performance of all
obligations arising under any applications executed by the Mortgagor in connection with any of the
Letters of Credit, including the obligation of the Mortgagor to reimburse the Lenders for any draws
under the Letters of Credit, (iv) the payment of all other indebtedness, obligations and
liabilities that this Mortgage secures pursuant to any of its terms, and (v) the performance and
observance of the covenants, conditions, agreements, representations, warranties and other
liabilities and obligations of the Mortgagor that are evidenced or secured by or otherwise provided
in the Notes, this Mortgage and any and all other mortgages, security agreements, assignments of
leases and rents, guaranties, letters of credit and any other documents and instruments now or
hereafter executed by any Borrower or any party related thereto or affiliated therewith to
evidence, secure or guarantee the payment of all or any portion of the Loan and such other
indebtedness as may be evidenced from time to time by or under the Notes and any and all renewals,
extensions, amendments and replacements of this Mortgage, the Notes, the Credit Agreement and any
such other documents and instruments (the Notes, the Credit Agreement, this Mortgage, such other
mortgages, security agreements, assignments of leases and rents, guaranties, letters of credit, and
any other documents and instruments now or hereafter executed and delivered in connection with the
Loan, and any and all amendments, renewals, extensions and replacements hereof and thereof, being
sometimes referred to collectively as the “Loan Documents” and individually as a “Loan
Document”).

     PROVIDED NEVERTHELESS, that if the Mortgagor, the Mortgagor’s administrators, representatives,
successors or assigns, shall pay to the Mortgagee, its successors or assigns, the Indebtedness,
according to the terms of the Loan Documents of even date herewith, the terms and conditions of
which are incorporated herein by reference and made a part hereof, together with any extensions or
renewals thereof, due and payable with interest thereon at the variable rate set forth therein,
executed by the Mortgagor and payable to the Mortgagee, the balance of said principal sum together
with interest thereon being due and payable in any event on the Maturity Date, and shall repay to
the Mortgagee, its successors or assigns, at the times demanded and with interest thereon at the
same rates as specified in the Loan Documents, all sums advanced in protecting the lien of this
Mortgage, including taxes, assessments, charges, claims, fines, impositions, insurance premiums,
amounts due upon prior or superior mortgages and other prior or superior liens, encumbrances and
interests, and legal expenses and reasonable attorney’s fees and all sums advanced for any other
purpose authorized herein, and shall keep and perform all of the covenants and agreements herein
contained, then this Mortgage shall become null and void, and shall be released at the Mortgagor’s
expense.

IT IS FURTHER UNDERSTOOD AND AGREED THAT:

	1.	 	Title.

     The Mortgagor represents, warrants and covenants that (a) the Mortgagor is the holder of the
fee simple title to the Premises, free and clear of all liens and encumbrances, except those liens
and encumbrances in favor of the Mortgagee and those other exceptions set forth in that certain
commitment for mortgagee’s title insurance order number 212400 issued in connection herewith by
Commonwealth Land Title Insurance Company (collectively, the “Permitted Exceptions”); and
(b) the Mortgagor has legal power and authority to mortgage and convey the Premises.

6

 

	2.	 	Maintenance, Repair, Restoration, Prior Liens, Parking.

     The Mortgagor covenants that, so long as any portion of the Indebtedness remains unpaid, the
Mortgagor will:

     (a) promptly repair, restore or rebuild any Improvements now or hereafter on the
Premises which may become damaged or be destroyed to a condition substantially similar to
the condition immediately prior to such damage or destruction, whether or not proceeds of
insurance are available or sufficient for the purpose, unless otherwise permitted by the
Mortgagee in its reasonable credit judgment;

     (b) keep the Premises in good condition and repair (ordinary wear and tear excepted),
without waste, and free from mechanics’, materialmen’s or like liens or claims or other
liens or claims for lien (subject to the Mortgagor’s right to contest liens as permitted by
the terms of Section 26 hereof), other than Permitted Liens (as defined in the Credit
Agreement) and the Permitted Exceptions;

     (c) pay when due the Indebtedness in accordance with the terms of the Notes and the
other Loan Documents and duly perform and observe all of the terms, covenants and conditions
to be observed and performed by the Mortgagor under the Notes, this Mortgage and the other
Loan Documents;

     (d) pay when due any indebtedness which may be secured by a Permitted Lien or charge on
the Premises on a parity with, superior to or inferior to the lien hereof, and upon request
exhibit satisfactory evidence of the discharge of such lien to the Mortgagee (subject to the
Mortgagor’s right to contest liens as permitted by the terms of Section 26 hereof);

     (e) complete within a reasonable time any Improvements now or at any time in the
process of erection upon the Premises;

     (f) comply with all requirements of law, municipal ordinances or restrictions and
covenants of record with respect to the Premises and the use thereof;

     (g) obtain and maintain in full force and effect, and abide by and satisfy the material
terms and conditions of, all material permits, licenses, registrations and other
authorizations with or granted by any governmental authorities that may be required from
time to time with respect to the performance of its obligations under this Mortgage;

     (h) except for the existing construction project begun in May 2006, make no material
alterations in the Premises or demolish any portion of the Premises without the Mortgagee’s
prior written consent (which consent shall not be unreasonably withheld or delayed), except
as required by law or municipal ordinance and except as provided in the Credit Agreement;

7

 

     (i) suffer or permit no change in the use or general nature of the occupancy of the
Premises, without the Mortgagee’s prior written consent (which consent shall not be
unreasonably withheld or delayed);

     (j) not initiate or acquiesce in any zoning reclassification with respect to the
Premises, without the Mortgagee’s prior written consent (which consent shall not be
unreasonably withheld or delayed);

     (k) provide and thereafter maintain adequate parking areas within the Premises as may
be required by law, ordinance or regulation (whichever may be greater), together with any
sidewalks, aisles, streets, driveways and sidewalk cuts and sufficient paved areas for
ingress, egress and right-of-way to and from the adjacent public thoroughfares necessary or
desirable for the use thereof; and

     (l) shall comply, and shall cause the Premises at all times to be operated in
compliance, with all applicable federal, state, local and municipal environmental, health
and safety laws, statutes, ordinances, rules and regulations (except such non-compliance
that could not, if enforced in accordance with applicable law, reasonably be expected to
result, either individually or in the aggregate, in a Material Adverse Effect (as defined in
the Credit Agreement)), including, without limitation, Mortgagor shall (i) ensure, and cause
each of its subsidiaries to ensure, that no person who owns twenty percent (20.00%) or more
of the equity interests in the Mortgagor, or otherwise controls the Mortgagor or any of its
subsidiaries is or shall be listed on the Specially Designated Nationals and Blocked Person
List or other similar lists maintained by the Office of Foreign Assets Control
(“OFAC”), the Department of the Treasury or included in any Executive Orders, (ii)
not use or permit the use of the proceeds of the Loan to violate any of the foreign asset
control regulations of OFAC or any enabling statute or Executive Order relating thereto, and
(iii) comply, and cause each of its subsidiaries to comply, with all applicable Bank Secrecy
Act (“BSA”) laws and regulations, as amended.

	3.	 	Payment of Taxes and Assessments.

     The Mortgagor will pay when due and before any penalty attaches, all general and special
taxes, assessments, water charges, sewer charges, and other fees, taxes, charges and assessments of
every kind and nature whatsoever (all herein generally called “Taxes”), whether or not
assessed against the Mortgagor, if applicable to the Premises or any interest therein, or the
Indebtedness, or any obligation or agreement secured hereby, subject to the Mortgagor’s right to
contest the
same, as provided by the terms hereof; and the Mortgagor will, upon written request, furnish to the
Mortgagee duplicate receipts therefor within ten (10) days after the Mortgagee’s request.

	4.	 	Tax Deposits.

     Upon the occurrence of an Event of Default, and at the Mortgagee’s option, the Mortgagor shall
deposit with the Mortgagee, on the first day of each month until the Indebtedness is fully paid, a
sum equal to one-twelfth (1/12th) of one hundred five percent

8

 

(105.00%) of the most recent
ascertainable annual Taxes on the Premises. If requested by the Mortgagee, the Mortgagor shall
also deposit with the Mortgagee an amount of money which, together with the aggregate of the
monthly deposits to be made pursuant to the preceding sentence as of one month prior to the date on
which the next installment of annual Taxes for the current calendar year become due, shall be
sufficient to pay in full such installment of annual Taxes, as estimated by the Mortgagee. Such
deposits are to be held without any allowance of interest and are to be used for the payment of
Taxes next due and payable when they become due. If the funds so deposited are insufficient to pay
any such Taxes for any year (or installments thereof, as applicable) when the same shall become due
and payable, the Mortgagor shall, within ten (10) days after receipt of written demand therefor,
deposit additional funds as may be necessary to pay such Taxes in full. If the funds so deposited
exceed the amount required to pay such Taxes for any year, the excess shall be applied toward
subsequent deposits. Said deposits need not be kept separate and apart from any other funds of the
Mortgagee. The Mortgagee, in making any payment hereby authorized relating to Taxes, may do so
according to any bill, statement or estimate procured from the appropriate public office without
inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof.

	5.	 	Mortgagee’s Interest In and Use of Deposits.

     Upon the occurrence and during the continuance of an Event of Default, the Mortgagee may, at
its option, apply any monies at the time on deposit pursuant to Section 4 hereof to cure an Event
of Default or to pay any of the Indebtedness in such order and manner as the Mortgagee may elect.
If such deposits are used to cure an Event of Default or pay any of the Indebtedness, the Mortgagor
shall immediately, upon demand by the Mortgagee, deposit with the Mortgagee an amount equal to the
amount expended by the Mortgagor from the deposits. When the Indebtedness has been fully paid, any
remaining deposits shall be returned to the Mortgagor. Such deposits are hereby pledged as
additional security for the Indebtedness and shall not be subject to the direction or control of
the Mortgagor. The Mortgagee shall not be liable for any failure to apply to the payment of Taxes
any amount so deposited unless the Mortgagor, prior to an Event of Default, shall have requested
the Mortgagee in writing to make application of such funds to the payment of such amounts,
accompanied by the bills for such Taxes. The Mortgagee shall not be liable for any act or omission
taken in good faith or pursuant to the instruction of any party.

	6.	 	Insurance.

     (a) The Mortgagor shall at all times keep all buildings, improvements, fixtures and articles
of personal property now or hereafter situated on the Premises insured against loss or damage by
fire and such other hazards as may reasonably be required by the Mortgagee, in accordance with the
terms, coverages and provisions described in and required by the Credit Agreement. Unless the
Mortgagor provides the Mortgagee evidence of the insurance coverages required hereunder, the
Mortgagee may purchase insurance at the Mortgagor’s expense to cover the Mortgagee’s interest in
the Premises. The insurance may, but need not, protect the Mortgagor’s interest. The coverages
that the Mortgagee purchases may not pay any claim that the Mortgagor makes or any claim that is
made against the Mortgagor in connection with the

9

 

Premises. The Mortgagor may later cancel any
insurance purchased by the Mortgagee, but only after providing the Mortgagee with evidence that the
Mortgagor has obtained insurance as required by this Mortgage. If the Mortgagee purchases
insurance for the Premises, the Mortgagor will be responsible for the costs of such insurance,
including, without limitation, interest and any other charges which the Mortgagee may impose in
connection with the placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to the Indebtedness. The
cost of the insurance may be more than the cost of insurance the Mortgagor may be able to obtain on
its own.

     (b) The Mortgagor shall not take out separate insurance concurrent in form or contributing in
the event of loss with that required to be maintained hereunder unless the Mortgagee is included
thereon as the loss payee or an additional insured as applicable, under a standard mortgage clause
acceptable to the Mortgagee and such separate insurance is otherwise acceptable to the Mortgagee.

     (i) In the event of loss, all insurance proceeds arising therefrom shall be applied as
set forth in Section 2.14(b) of the Credit Agreement.

	7.	 	Condemnation.

     If all or any part of the Premises are damaged, taken or acquired, either temporarily or
permanently, in any condemnation proceeding, or by exercise of the right of eminent domain, the
amount of any award or other payment for such taking or damages made in consideration thereof shall
be applied as set forth in Section 2.14(b) of the Credit Agreement.

	8.	 	Stamp Tax.

     If, by the laws of the United States of America, or of any state or political subdivision
having jurisdiction over the Mortgagor, any tax is due or becomes due in respect of the execution
and delivery of this Mortgage, the Notes or any of the other Loan Documents, the Mortgagor shall
pay such tax in the manner required by any such law. The Mortgagor further agrees to reimburse the
Mortgagee for any sums which the Mortgagee may expend by reason of the imposition of any such tax.
Notwithstanding the foregoing, the Mortgagor shall not be required to pay any income or franchise
taxes of the Mortgagee.

	9.	 	Rents and Leases.

     (a) The Mortgagor hereby represents and warrants to the Mortgagee that: (i) the Mortgagor is
the landlord under all Leases; (ii) there is no other existing assignment of the Mortgagor’s entire
or any part of its interest in or to any of the Leases, or any of the rents, issues, income or
profits assigned hereunder, nor has the Mortgagor entered into any agreement to subordinate any of
the Leases or the Mortgagor’s right to receive any of the rents, issues, income or profits assigned
hereunder; (c) the Mortgagor has not executed any instrument or performed any act which may prevent
the Mortgagee from operating under any of the terms and provisions hereof or which would limit the
Mortgagee in such operation; and (iv) there are no defaults by the landlord and, to the Mortgagor’s
knowledge, there are no material defaults by tenants under any Leases.

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     (b) The Mortgagor covenants and agrees that it shall: (i) not lease any portion of the
Premises unless the Mortgagor obtains the Mortgagee’s prior written consent to all aspects of such
lease (which consent shall not be unreasonably withheld or delayed); and (ii) observe and perform
all of the covenants, terms, conditions and agreements contained in the Leases to be observed or
performed by the landlord thereunder, and the Mortgagor shall not do or suffer to be done anything
to impair the security thereof.

     (c) The Mortgagor shall not (i) release the liability of any tenant under any Lease, (ii)
consent to any tenant’s withholding of rent or making monetary advances and off-setting the same
against future rentals, (iii) consent to any tenant’s claim of a total or partial eviction, (iv)
consent to a tenant termination or cancellation of any Lease, except as specifically provided
therein, or (v) enter into any oral leases with respect to all or any portion of the Premises.

     (d) The Mortgagor shall not: (i) collect any of the rents, issues, income or profits assigned
hereunder more than thirty days in advance of the time when the same shall become due, except for
security or similar deposits; (ii) make any other assignment of its entire or any part of its
interest in or to any or all Leases, or any or all rents, issues, income or profits assigned
hereunder, except as specifically permitted by the Loan Documents; (iii) modify the terms and
provisions of any Lease, nor shall the Mortgagor give any consent (including, but not limited to,
any consent to any assignment of, or subletting under, any Lease, except as expressly permitted
thereby) or approval, required or permitted by such terms and provisions or cancel or terminate any
Lease, without the Mortgagee’s prior written consent (which consent shall not be unreasonably
withheld or delayed); (iv) accept a surrender of any Lease or convey or transfer, or suffer or
permit a conveyance or transfer, of the premises demised under any Lease or of any interest in any
Lease so as to effect, directly or indirectly, proximately or remotely, a merger of the estates and
rights of, or a termination or diminution of the obligations of, any tenant thereunder, it being
understood that any termination fees payable under a Lease for the early termination or surrender
thereof shall be paid jointly to the Mortgagor and the Mortgagee (v) alter, modify or change the
terms of any guaranty of any Lease, or cancel or terminate any such guaranty or do or permit to be
done anything which would terminate any such guaranty as a matter of law; (vi) waive or excuse the
obligation to pay rent under any Lease.

     (e) The Mortgagor shall, at its sole cost and expense: (i) appear in and defend any and all
actions and proceedings arising under, relating to or in any manner connected with any Lease or the
obligations, duties or liabilities of the lessor or any tenant or guarantor thereunder, and shall
pay all costs and expenses of the Mortgagee, including court costs and reasonable attorneys’ fees,
in any such action or proceeding in which the Mortgagee may appear through no fault of the
Mortgagee; (ii) give prompt notice to the Mortgagee of any notice of any default by the lessor
under any Lease received from any tenant or guarantor thereunder; (iii) enforce the observance and
performance of each covenant, term, condition and agreement contained in each Lease to be observed
and performed by the tenants and guarantors thereunder and shall immediately notify the Mortgagee
of any material breach by the tenant or guarantor under any such Lease.

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     (f) The Mortgagor shall not permit any of the Leases to become subordinate to any lien or
liens other than liens securing the indebtedness secured hereby or liens for general real estate
taxes not delinquent.

     (g) The Mortgagor shall not execute hereafter any Lease unless there shall be included therein
a provision providing that the tenant thereunder acknowledges that such Lease has been assigned
pursuant to this Mortgage and agrees not to look to the Mortgagee as mortgagee, mortgagee in
possession or successor in title to the Premises for accountability for any security deposit
required by lessor under such Lease unless such sums have actually been received in cash by the
Mortgagee as security for tenant’s performance under such Lease.

     (h) If any tenant under any Lease is or becomes the subject of any proceeding under the
Federal Bankruptcy Code, as amended from time to time, or any other federal, state or local statute
which provides for the possible termination or rejection of the Leases assigned hereby, the
Mortgagor covenants and agrees that if any such Lease is so terminated or rejected, no settlement
for damages shall be made without the prior written consent of the Mortgagee, and any check in
payment of damages for termination or rejection of any such Lease will be made payable both to the
Mortgagor and the Mortgagee. The Mortgagor hereby assigns any such payment to the Mortgagee and
further covenants and agrees that upon the request of the Mortgagee, it will duly endorse to the
order of the Mortgagee any such check.

	10.	 	Effect of Extensions of Time and Other Changes.

     If the payment of the Indebtedness or any part thereof is extended or varied, if any part of
any security for the payment of the Indebtedness is released, if the rate of interest charged under
the Notes is changed or if the time for payment thereof is extended or varied, all persons now or
at any time hereafter liable therefor, or interested in the Premises or having an interest in the
Mortgagor, shall be held to assent to such extension, variation, release or change and their
liability and the lien and all of the provisions hereof shall continue in full force, any right of
recourse against all such persons being expressly reserved by the Mortgagee, notwithstanding such
extension, variation, release or change.

	11.	 	Effect of Changes in Laws Regarding Taxation.

     If any law is enacted after the date hereof requiring (a) the deduction of any lien on the
Premises from the value thereof for the purpose of taxation or (b) the imposition upon the
Mortgagee of the payment of the whole or any part of the Taxes, charges or liens herein required to
be paid by the Mortgagor, or (c) a change in the method of taxation of mortgages or debts secured
by mortgages or the Mortgagee’s interest in the Premises, or the manner of collection of taxes, so
as to affect this Mortgage or the Indebtedness or the holders thereof, then the Mortgagor, upon
demand by the Mortgagee, shall pay such Taxes or charges, or reimburse the Mortgagee therefor;
provided, however, that the Mortgagor shall not be deemed to be required to pay any income or
franchise taxes of the Mortgagee.

	12.	 	Mortgagee’s Performance of Defaulted Acts and Expenses Incurred by Mortgagee.

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     If an Event of Default has occurred, the Mortgagee may, but need not, make any payment or
perform any act herein required of the Mortgagor in any form and manner deemed expedient by the
Mortgagee, and may, but need not, make full or partial payments of principal or interest on prior
encumbrances, if any, and purchase, discharge, compromise or settle any tax lien or other prior
lien or title or claim thereof, or redeem from any tax sale or forfeiture affecting the Premises or
consent to any tax or assessment or cure any default of the Mortgagor in any lease of the Premises.
All monies paid for any of the purposes herein authorized and all expenses paid or incurred in
connection therewith, including reasonable attorneys’ fees, and any other monies advanced by the
Mortgagee in regard to any tax referred to in Section 8 above or to protect the Premises or the
lien hereof, shall be so much additional Indebtedness, and shall become immediately due and payable
by the Mortgagor to the Mortgagee, upon demand, and with interest thereon accruing from the date of
such demand until paid at the rate of interest payable during the continuance of an Event of
Default pursuant to the Credit Agreement (the “Default Rate”). In addition to the
foregoing, any costs, expenses and fees, including reasonable attorneys’ fees, incurred by the
Mortgagee in connection with (a) sustaining the lien of this Mortgage or its priority, (b)
protecting or enforcing any of the Mortgagee’s rights hereunder, (c) recovering any Indebtedness,
(d) any litigation or proceedings affecting the Notes, this Mortgage, any of the other Loan
Documents or the Premises, including without limitation, bankruptcy and probate proceedings, or (e)
preparing for the commencement, defense or participation in any threatened litigation or
proceeding affecting the Notes, this Mortgage, any of the other Loan Documents or the Premises that
is instituted without the fault of the Mortgagee, shall be so much additional Indebtedness, and
shall become immediately due and payable by the Mortgagor to the Mortgagee, upon demand, and with
interest thereon accruing from the date of such demand until paid at the Default Rate. The
interest accruing under this section shall be immediately due and payable by the Mortgagor to the
Mortgagee, and shall be additional Indebtedness evidenced by the Notes and secured by this
Mortgage. The Mortgagee’s failure to act shall never be considered as a waiver of any right
accruing to the Mortgagee on account of any Event of Default. Should any amount paid out or
advanced by the Mortgagee hereunder, or pursuant to any agreement executed by the Mortgagor in
connection with the Loan, be used directly or indirectly to pay off, discharge or satisfy, in whole
or in part, any lien or encumbrance upon the Premises or any part thereof, then the Mortgagee shall
be subrogated to any and all rights, equal or superior titles, liens and equities, owned or claimed
by any owner or holder of said outstanding liens, charges and indebtedness,
regardless of whether said liens, charges and indebtedness are acquired by assignment or have been
released of record by the holder thereof upon payment.

	13.	 	Security Agreement.

     The Mortgagor and the Mortgagee agree that this Mortgage shall constitute a Security Agreement
within the meaning of the Code with respect to the Mortgagor’s right, title and interest in and to
(a) all sums at any time on deposit for the benefit of the Mortgagor or held by the Mortgagee
(whether deposited by or on behalf of the Mortgagor or anyone else) pursuant to any of the
provisions of this Mortgage or the other Loan Documents, and (b) with respect to any personal
property included in the granting clauses of this Mortgage, which personal property may not be
deemed to be affixed to the Premises or may not constitute a “Fixture” (within the

13

 

meaning
of Section 9-102(41) of the Code and which property is hereinafter referred to as “Personal
Property”), and all replacements of, substitutions for, additions to, and the proceeds thereof,
and the “Supporting Obligations” (as defined in the Code) (all of said Personal Property
and the replacements, substitutions and additions thereto and the proceeds thereof being sometimes
hereinafter collectively referred to as “Collateral”), and that a security interest in and
to the Collateral is hereby granted to the Mortgagee, and the Collateral and all of the Mortgagor’s
right, title and interest therein are hereby assigned to the Mortgagee, all to secure payment of
the Indebtedness. All of the provisions contained in this Mortgage pertain and apply to the
Collateral as fully and to the same extent as to any other property comprising the Premises; and
the following provisions of this section shall not limit the applicability of any other provision
of this Mortgage but shall be in addition thereto:

     (a) The Mortgagor (being the Debtor as that term is used in the Code) is and will be
the true and lawful owner of the Collateral, subject to no liens, charges or encumbrances
other than the lien hereof, other liens and encumbrances benefiting the Mortgagee and no
other party, and liens and encumbrances, if any, expressly permitted by the other Loan
Documents.

     (b) The Collateral is to be used by the Mortgagor solely for business purposes.

     (c) The Collateral will be kept at the Real Estate and, except for Obsolete Collateral
(as hereinafter defined), will not be removed therefrom without the consent of the Mortgagee
(being the Secured Party as that term is used in the Code). The Collateral may be affixed to
the Real Estate but will not be affixed to any other real estate.

     (d) The only persons having any interest in the Premises are the Mortgagor, the
Mortgagee and holders of interests, if any, expressly permitted hereby.

     (e) No Financing Statement (other than Financing Statements showing the Mortgagee as
the sole secured party, or with respect to Permitted Liens or liens or encumbrances, if any,
expressly permitted hereby) covering any of the Collateral or any proceeds thereof is on
file in any public office except pursuant hereto or the Credit Agreement; and the Mortgagor,
at its own cost and expense, upon demand, will furnish to
the Mortgagee such further information and will execute and deliver to the Mortgagee
such financing statements and other documents in form reasonably satisfactory to the
Mortgagee and will do all such acts as the Mortgagee may request at any time or from time to
time or as may be necessary or appropriate to establish and maintain a perfected security
interest in the Collateral as security for the Indebtedness, subject to no other liens or
encumbrances, other than liens or encumbrances benefiting the Mortgagee and no other party,
and liens and encumbrances (if any) expressly permitted hereby; and the Mortgagor will pay
the cost of filing or recording such financing statements or other documents, and this
instrument, in all public offices wherever filing or recording is deemed by the Mortgagee to
be desirable. The Mortgagor hereby irrevocably authorizes the Mortgagee at any time, and
from time to time, to file in any jurisdiction any initial financing statements and
amendments thereto, without the signature of the Mortgagor

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that (i) indicate the Collateral
(A) is comprised of all assets of the Mortgagor or words of similar effect, regardless of
whether any particular asset comprising a part of the Collateral falls within the scope of
Article 9 of the Uniform Commercial Code of the jurisdiction wherein such financing
statement or amendment is filed, or (B) as being of an equal or lesser scope or within
greater detail as the grant of the security interest set forth herein, and (ii) contain any
other information required by Section 5 of Article 9 of the Uniform Commercial Code of the
jurisdiction wherein such financing statement or amendment is filed regarding the
sufficiency or filing office acceptance of any financing statement or amendment, including
(A) whether the Mortgagor is an organization, the type of organization and any
organizational identification number issued to the Mortgagor, and (B) 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 the real property to which the
Collateral relates. The Mortgagor agrees to furnish any such information to the Mortgagee
promptly upon request. The Mortgagor further ratifies and affirms its authorization for any
financing statements and/or amendments thereto, executed and filed by the Mortgagee in any
jurisdiction prior to the date of this Mortgage. In addition, the Mortgagor shall make
appropriate entries on its books and records disclosing the Mortgagee’s security interests
in the Collateral.

     (f) Upon an Event of Default hereunder, the Mortgagee shall, to the extent permitted by
applicable law, have the remedies of a secured party under the Code, including, without
limitation, the right to take immediate and exclusive possession of the Collateral, or any
part thereof, and for that purpose, so far as the Mortgagor can give authority therefor,
with or without judicial process, may enter (if this can be done without breach of the
peace) upon any place which the Collateral or any part thereof may be situated and remove
the same therefrom (provided that if the Collateral is affixed to real estate, such removal
shall be subject to the conditions stated in the Code); and the Mortgagee shall be entitled
to hold, maintain, preserve and prepare the Collateral for sale, until disposed of, or may
propose to retain the Collateral subject to the Mortgagor’s right of redemption in
satisfaction of the Mortgagor’s obligations, as provided in the Code. The Mortgagee may
render the Collateral unusable without removal and may dispose of the Collateral on the
Premises. The Mortgagee may require the Mortgagor to assemble the Collateral and make it
available to the Mortgagee for its possession at a place to be
designated by the Mortgagee which is reasonably convenient to both parties. The
Mortgagee will give the Mortgagor at least ten (10) days notice of the time and place of any
public sale of the Collateral or of the time after which any private sale or any other
intended disposition thereof is made. The requirements of reasonable notice shall be met if
such notice is mailed, by certified United States mail or equivalent, postage prepaid, to
the address of the Mortgagor hereinafter set forth at least ten (10) days before the time of
the sale or disposition. The Mortgagee may buy at any public sale. The Mortgagee may buy
at private sale if the Collateral is of a type customarily sold in a recognized market or is
of a type which is the subject of widely distributed standard price quotations. Any such
sale may be held in conjunction with any foreclosure sale of the Premises. If the Mortgagee
so elects, the Premises and the Collateral may be sold as one lot. The net proceeds
realized upon any such disposition, after deduction for the expenses of retaking, holding,
preparing for sale, selling and the reasonable attorneys’ fees and legal expenses

15

 

incurred
by the Mortgagee, shall be applied against the Indebtedness in such order or manner as the
Mortgagee shall select. The Mortgagee will account to the Mortgagor for any surplus
realized on such disposition.

     (g) The terms and provisions contained in this section, unless otherwise defined herein
or the context otherwise requires, shall have the meanings and be construed as provided in
the Code.

     (h) This Mortgage is intended to be a financing statement within the purview of Section
9-502(b) of the Code with respect to the Collateral and the goods described herein, which
goods are or may become fixtures relating to the Premises. The addresses of the Mortgagor
(Debtor) and the Mortgagee (Secured Party) are hereinbelow set forth. This Mortgage is to be
filed for recording with the appropriate recording offices of the county or counties where
the Premises are located. The Mortgagor is the record owner of the Premises.

     (i) To the extent permitted by applicable law, the security interest created hereby is
specifically intended to cover all Leases between the Mortgagor or its agents as lessor, and
various tenants named therein, as lessee, including all extended terms and all extensions
and renewals of the terms thereof, as well as any amendments to or replacement of said
Leases, together with all of the right, title and interest of the Mortgagor, as lessor
thereunder.

     (j) The Mortgagor represents and warrants that: (i) the Mortgagor is the record owner
of the Premises; (ii) the Mortgagor’s chief executive office is located in the State of
Minnesota; (iii) the Mortgagor’s state of formation is the State of Delaware; (iv) the
Mortgagor’s exact legal name is as set forth on Page 1 of this Mortgage; and (v) the
Mortgagor’s organizational identification number is 2922261.

     (k) The Mortgagor hereby agrees that: (i) where Collateral is in possession of a third
party, the Mortgagor will join with the Mortgagee in notifying the third party of the
Mortgagee’s interest and obtaining an acknowledgment from the third party that it is
holding the Collateral for the benefit of the Mortgagee; (ii) the Mortgagor will
cooperate with the Mortgagee in obtaining control with respect to Collateral consisting of:
deposit accounts, investment property, letter of credit rights and electronic chattel paper;
and (iii) until the Indebtedness is paid in full, Mortgagor will not change the state where
it is located or change its name or form of organization without giving the Mortgagee at
least thirty (30) days prior written notice in each instance.

	14.	 	Restrictions on Transfer.

     (a) The Mortgagor, without the prior written consent of the Mortgagee (which consent shall not
be unreasonably withheld or delayed), shall not effect, suffer or permit any Prohibited Transfer
(as defined herein). Any conveyance, sale, assignment, transfer, lien, pledge, mortgage, security
interest or other encumbrance or alienation (or any agreement to do any of the foregoing) of any of
the following properties or interests shall constitute a “Prohibited Transfer”:

16

 

     (i) The Premises or any part thereof or interest therein, excepting only sales or other
dispositions of Collateral (“Obsolete Collateral”) no longer useful or necessary in
connection with the operation of the Premises, provided that prior to the sale or other
disposition thereof, such Obsolete Collateral has been replaced by Collateral of at least
equal value and utility which is subject to the lien hereof with the same priority as with
respect to the Obsolete Collateral unless such Obsolete Collateral is no longer needed in
connection with the operation of the Premises; or

     (ii) If there shall be any Change of Control (as defined in the Credit Agreement);

in each case whether any such conveyance, sale, assignment, transfer, lien, pledge, mortgage,
security interest, encumbrance or alienation is effected directly, indirectly (including the
nominee agreement), voluntarily or involuntarily, by operation of law or otherwise; provided,
however, that the foregoing provisions of this section shall not apply (i) to liens securing the
Indebtedness, (ii) to the lien of current taxes and assessments not in default, (iii) to any
transfers of the Premises, or part thereof, or interest therein, or any beneficial interests, or
shares of stock or partnership or joint venture interests, as the case may be, by or on behalf of
an owner thereof who is deceased or declared judicially incompetent, to such owner’s heirs,
legatees, devisees, executors, administrators, estate or personal representatives, or (iv) to
leases permitted by the terms of the Loan Documents, if any.

     (b) In determining whether or not to make the Loan, the Mortgagee evaluated the background and
experience of the Mortgagor and its directors, officers and equity holders in owning and operating
property such as the Premises, found it acceptable and relied and continues to rely upon same as
the means of maintaining the value of the Premises which is the Mortgagee’s security for the Notes.
The Mortgagor and its directors, officers and equity holders are well experienced in borrowing
money and owning and operating property such as the Premises, were ably represented by a licensed
attorney at law in the negotiation and documentation of the Loan and bargained at arm’s length and
without duress of any kind for all of the terms and conditions of
the Loan, including this provision. The Mortgagor recognizes that the Mortgagee is entitled
to keep its loan portfolio at current interest rates by either making new loans at such rates or
collecting assumption fees and/or increasing the interest rate on a loan, the security for which is
purchased by a party other than the original Mortgagor. The Mortgagor further recognizes that any
secondary junior financing placed upon the Premises (i) may divert funds which would otherwise be
used to pay the Notes; (ii) could result in acceleration and foreclosure by any such junior
encumbrancer which would force the Mortgagee to take measures and incur expenses to protect its
security; (iii) would detract from the value of the Premises should the Mortgagee come into
possession thereof with the intention of selling same; and (iv) would impair the Mortgagee’s right
to accept a deed in lieu of foreclosure, as a foreclosure by the Mortgagee would be necessary to
clear the title to the Premises. In accordance with the foregoing and for the purposes of (a)
protecting the Mortgagee’s security, both of repayment and of value of the Premises; (b) giving the
Mortgagee the full benefit of its bargain and contract

17

 

with the Mortgagor; (c) allowing the
Mortgagee to raise the interest rate and collect assumption fees; and (d) keeping the Premises free
of subordinate financing liens, the Mortgagor agrees that if this section is deemed a restraint on
alienation, that it is a reasonable one.

	15.	 	Events of Default; Acceleration.

     Each of the following shall constitute an “Event of Default” for purposes of this
Mortgage:

     (a) The Mortgagor fails to pay (i) any installment of principal payable pursuant to the
terms of the Notes, or (ii) any other amount payable to Mortgagee under the Notes,
including, without limitation, interest payable pursuant to the terms of the Notes, this
Mortgage or any of the other Loan Documents when any such payment is due in accordance with
the terms hereof or thereof;

     (b) The Mortgagor fails to perform or cause to be performed any other obligation or
observe any other condition, covenant, term, agreement or provision required to be performed
or observed by the Mortgagor under the Notes, this Mortgage or any of the other Loan
Documents; provided, however, that if such failure by its nature can be cured, then so long
as the continued operation and safety of the Premises, and the priority, validity and
enforceability of the liens created by the Mortgage or any of the other Loan Documents and
the value of the Premises are not impaired, threatened or jeopardized, then the Mortgagor
shall have a period (the “Cure Period”) of thirty (30) days after the Mortgagor
receives written notice of such failure to cure the same and an Event of Default shall not
be deemed to exist during the Cure Period, provided further that if the Mortgagor commences
to cure such failure during the Cure Period and is diligently and in good faith attempting
to effect such cure, the Cure Period shall be extended for thirty (30) additional days, but
in no event shall the Cure Period be longer than sixty (60) days in the aggregate;

     (c) the existence of any inaccuracy or untruth in any material respect in any
certification, representation or warranty contained in this Mortgage or any of the other
Loan Documents or of any statement or certification as to facts delivered to the
Mortgagee by the Mortgagor;

     (d) The Mortgagor files a voluntary petition in bankruptcy or is adjudicated a bankrupt
or insolvent or files any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the present or
any future federal, state, or other statute or law, or seeks or consents to or acquiesces in
the appointment of any trustee, receiver or similar officer of the Mortgagor or of all or
any substantial part of the property of the Mortgagor, the Premises or all or a substantial
part of the assets of the Mortgagor are attached, seized, subjected to a writ or distress
warrant or are levied upon unless the same is released or located within sixty (60) days;

18

 

     (e) the commencement of any involuntary petition in bankruptcy against the Mortgagor,
or the institution against the Mortgagor of any reorganization, arrangement, composition,
readjustment, dissolution, liquidation or similar proceedings under any present or future
federal, state or other statute or law, or the appointment of a receiver, trustee or similar
officer for all or any substantial part of the property of the Mortgagor or any of the other
Borrower that shall remain undismissed or undischarged for a period of sixty (60) days;

     (f) the occurrence of a Prohibited Transfer;

     (g) the occurrence of an Event of Default under the Notes, the Credit Agreement or any
of the other Loan Documents; or

     (h) the occurrence of any default or event of default, after the expiration of any
applicable periods of notice or cure, under any document or agreement evidencing or securing
any other obligation or indebtedness of the Mortgagor and/or the Guarantor to the Mortgagee.

If an Event of Default occurs, the Mortgagee may, at its option, declare the whole of the
Indebtedness to be immediately due and payable without further notice to the Mortgagor, with
interest thereon accruing from the date of such Event of Default until paid at the Default Rate.

	16.	 	Foreclosure; Expense of Litigation.

     (a) When all or any part of the Indebtedness shall become due, whether by acceleration or
otherwise, the Mortgagee shall have the right to foreclose the lien hereof for such Indebtedness or
part thereof and/or exercise any right, power or remedy provided in this Mortgage or any of the
other Loan Documents in accordance with applicable law. In the event of a foreclosure sale, the
Mortgagee is hereby authorized, without the consent of the Mortgagor, to assign any and all
insurance policies to the purchaser at such sale or to take such other steps as the Mortgagee may
deem advisable to cause the interest of such purchaser to be protected by any of such insurance
policies.

     (b) In any suit to foreclose the lien hereof, there shall be allowed and included as
additional indebtedness in the decree for sale all expenditures and expenses which may be paid or
incurred by or on behalf of the Mortgagee for reasonable attorneys’ fees, appraisers’ fees, outlays
for documentary and expert evidence, stenographers’ charges, publication costs, and costs (which
may be estimated as to items to be expended after entry of the decree) of procuring all such
abstracts of title, title searches and examinations, title insurance policies, and similar data and
assurances with respect to the title as the Mortgagee may deem reasonably necessary either to
prosecute such suit or to evidence to bidders at any sale which may be had pursuant to such decree
the true condition of the title to or the value of the Premises. All expenditures and expenses of
the nature mentioned in this section and such other expenses and fees as may be incurred in the
enforcement of the Mortgagor’s obligations hereunder, the protection of said Premises and the
maintenance of the lien of this Mortgage, including the reasonable fees of any attorney employed by
the Mortgagee in any litigation or proceeding affecting this Mortgage, the

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Notes, or the Premises,
including probate and bankruptcy proceedings, or in preparations for the commencement or defense of
any proceeding or threatened suit or proceeding shall be immediately due and payable by the
Mortgagor, with interest thereon until paid at the Default Rate and shall be secured by this
Mortgage.

	17.	 	Application of Proceeds of Foreclosure Sale.

     The proceeds of any foreclosure sale of the Premises shall be distributed and applied in such
order as the Mortgagee may determine in its sole and absolute discretion.

	18.	 	Appointment of Receiver.

     Upon or at any time after the occurrence of an Event of Default and the filing of a complaint
to foreclose this Mortgage, the court in which such complaint is filed shall, upon petition by the
Mortgagee, appoint a receiver for the Premises in accordance with applicable law. Such appointment
may be made either before or after sale, without notice, without regard to the solvency or
insolvency of the Mortgagor at the time of application for such receiver and without regard to the
value of the Premises or whether the same shall be then occupied as a homestead or not and the
Mortgagee hereunder or any other holder of the Notes may be appointed as such receiver. Such
receiver shall have power to collect the rents, issues and profits of the Premises (i) during the
pendency of such foreclosure suit, (ii) in case of a sale and a deficiency, during the full
statutory period of redemption, whether there be redemption or not, and (iii) during any further
times when the Mortgagor, but for the intervention of such receiver, would be entitled to collect
such rents, issues and profits. Such receiver also shall have all other powers and rights that may
be necessary or are usual in such cases for the protection, possession, control, management and
operation of the Premises during said period, including, to the extent permitted by law, the right
to lease all or any portion of the Premises for a term that extends beyond the time of such
receiver’s possession without obtaining prior court approval of such lease. The court from time to
time may authorize the application of the net income received by the receiver in payment of (a) the
Indebtedness, or by any decree foreclosing this Mortgage, or any tax, special assessment or other
lien which may be or become superior to the lien hereof or of such decree,
provided such application is made prior to foreclosure sale, and (b) any deficiency upon a sale and
deficiency.

	19.	 	Mortgagee’s Right of Possession in Case of Default.

     At any time after an Event of Default has occurred and is continuing, the Mortgagor shall,
upon demand of the Mortgagee, surrender to the Mortgagee possession of the Premises. The
Mortgagee, in its discretion, may, with process of law, enter upon and take and maintain possession
of all or any part of the Premises, together with all documents, books, records, papers and
accounts relating thereto, and may exclude the Mortgagor and its employees, agents or servants
therefrom, and the Mortgagee may then hold, operate, manage and control the Premises, either
personally or by its agents. The Mortgagee shall have full power to use such measures, legal or
equitable, as in its discretion may be deemed proper or necessary to enforce the payment or
security of the avails, rents, issues, and profits of the Premises, including actions for the
recovery of rent, actions in forcible detainer and actions in distress for rent. At any time after
an

20

 

Event of Default has occurred, either with or without taking possession of the Premises, and to
the extent permitted by applicable law, the Mortgagee may demand, sue for, settle, compromise,
collect and give acquittances for all rents, issues, income and profits of and from the Premises
and pursue all remedies for enforcement of the Leases and all the lessor’s rights therein and
thereunder; provided, however, that so long as no Event of Default has occurred, the Mortgagor
shall have a license to collect and receive all rents, issues, income and profits of and from the
Premises. This Mortgage shall constitute an absolute and present transfer and assignment of the
Leases, and further an authorization and direction to the tenants under the Leases to pay all rents
and other amounts payable under the Leases to the Mortgagee, without proof of default hereunder,
upon receipt from the Mortgagee of written notice to thereafter pay all such rents and other
amounts to the Mortgagee and to comply with any notice or demand by the Mortgagee for observance or
performance of any of the covenants, terms, conditions and agreements contained in the Leases to be
observed or performed by the tenants thereunder, and the Mortgagor shall facilitate in all
reasonable ways the Mortgagee’s collection of such rents, issues, income and profits, and upon
request after the occurrence of an Event of Default, will execute written notices to the tenants
under the Leases to thereafter pay all such rents and other amounts to the Mortgagee. Without
limiting the generality of the foregoing, the Mortgagee shall have, to the extent permitted by
applicable law, full power to:

     (a) cancel or terminate any lease or sublease for any cause or on any ground which
would entitle the Mortgagor to cancel the same;

     (b) elect to disaffirm any lease or sublease which is then subordinate to the lien
hereof;

     (c) extend or modify any then existing leases and to enter into new leases, which
extensions, modifications and leases may provide for terms to expire, or for options to
lessees to extend or renew terms to expire, beyond the Termination Date and beyond the date
of the issuance of a deed or deeds to a purchaser or purchasers at a foreclosure sale, it
being understood and agreed that any such leases, and the options or other such
provisions to be contained therein, shall be binding upon the Mortgagor and all persons
whose interests in the Premises are subject to the lien hereof and upon the purchaser or
purchasers at any foreclosure sale, notwithstanding any redemption from sale, discharge of
the Indebtedness, satisfaction of any foreclosure judgment, or issuance of any certificate
of sale or deed to any purchaser;

     (d) make any repairs, renewals, replacements, alterations, additions, betterments and
improvements to the Premises as the Mortgagee deems are necessary;

     (e) insure and reinsure the Premises and all risks incidental to the Mortgagee’s
possession, operation and management thereof; and

     (f) receive all of such avails, rents, issues and profits.

	20.	 	Application of Income Received by Mortgagee.

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     The Mortgagee, in the exercise of the rights and powers hereinabove conferred upon it, shall
have full power to use and apply the avails, rents, issues and profits of the Premises to the
payment of or on account of the following, in such order as the Mortgagee may determine:

     (a) to the payment of the operating expenses of the Premises, including cost of
management and leasing thereof (which shall include compensation to the Mortgagee and its
agent or agents, if management be delegated to an agent or agents, and shall also include
lease commissions and other compensation and expenses of seeking and procuring tenants and
entering into leases), established claims for damages, if any, and premiums on insurance
hereinabove authorized;

     (b) to the payment of taxes and special assessments now due or which may hereafter
become due on the Premises; and

     (c) to the payment of any Indebtedness, including any deficiency which may result from
any foreclosure sale.

	21.	 	Rights Cumulative.

     Each right, power and remedy herein conferred upon the Mortgagee is cumulative and in addition
to every other right, power or remedy, express or implied, given now or hereafter existing under
any of the Loan Documents or at law or in equity, and each and every right, power and remedy herein
set forth or otherwise so existing may be exercised from time to time as often and in such order as
may be deemed expedient by the Mortgagee, and the exercise or the beginning of the exercise of one
right, power or remedy shall not be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy, and no delay or omission of the Mortgagee in the
exercise of any right, power or remedy accruing hereunder or arising otherwise shall impair any
such right, power or remedy, or be construed to be a waiver of any Event of Default or acquiescence
therein.

	22.	 	Mortgagee’s Right of Inspection.

     The Mortgagee and its representatives shall have the right to inspect the Premises and the
books and records with respect thereto at all reasonable times upon not less than twenty four (24)
hours prior notice to the Mortgagor, and access thereto, subject to the rights of tenants in
possession, shall be permitted for that purpose.

	23.	 	Release Upon Payment and Discharge of Mortgagor’s Obligations.

     The Mortgagee shall release this Mortgage and the lien hereof by proper instrument upon
payment and discharge of all Indebtedness, including payment of all reasonable expenses incurred by
the Mortgagee in connection with the execution of such release.

	24.	 	Release of and Resort to Collateral.

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     The Mortgagee may release, regardless of consideration and without the necessity for any
notice to or consent by the holder of any subordinate lien on the Premises, any part of the
Premises without, as to the remainder, in any way impairing, affecting, subordinating or releasing
the lien or security interest created in or evidenced by the Loan Documents or their status as a
first and prior lien and security interest in and to the Premises. For payment of the
Indebtedness, the Mortgagee may resort to any other security in such order and manner as the
Mortgagee may elect.

	25.	 	Notices.

     Any notices, communications and waivers under this Mortgage shall be in writing and shall be
(i) delivered in person, (ii) mailed, postage prepaid, either by registered or certified mail,
return receipt requested, or (iii) by overnight express carrier, addressed in each case as follows:

	 	 	 	 	 
	 

	 	To the Mortgagee
	 	CIT Healthcare LLC
	 

	 	 	 	505 Fifth Avenue, 6th Floor
	 

	 	 	 	New York, New York 10017
	 

	 	 	 	Attention: Mark McElwain, Vice President
	 
	 	 	 	 
	 

	 	With a copy to:
	 	McDermott Will & Emery LLP
	 

	 	 	 	227 West Monroe Street
	 

	 	 	 	Chicago, Illinois 60606
	 

	 	 	 	Attention: Jeffrey A. Jung
	 
	 	 	 	 
	 

	 	To the Mortgagor:
	 	American Medical Systems, Inc.
	 

	 	 	 	10700 Bren Road West
	 

	 	 	 	Minnetonka, Minnesota 55343
	 

	 	 	 	Attention:: John Armbruster
	 
	 	 	 	 
	 

	 	With copy to:
	 	Oppenheimer Wolff & Donnelly LLP
	 

	 	 	 	Plaza VII Suite 3300
	 

	 	 	 	45 South Seventh Street
	 

	 	 	 	Minneapolis, Minnesota 55404
	 

	 	 	 	Attention:: Thomas A. Letscher

or to any other address as to any of the parties hereto, as such party shall designate in a written
notice to the other party hereto. All notices sent pursuant to the terms of this section shall be
deemed received (i) if personally delivered, then on the date of delivery, (ii) if sent by
overnight, express carrier, then on the next federal banking day immediately following the day
sent, or (iii) if sent by registered or certified mail, then on the earlier of the third federal
banking day following the day sent or when actually received.

	26.	 	Waiver of Rights.

     To the extent permitted by applicable law, the Mortgagor hereby covenants and agrees that it
will not at any time insist upon or plead, or in any manner claim or take any advantage of,

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any
stay, exemption or extension law or any so-called “Moratorium Law” now or at any time hereafter in
force providing for the valuation or appraisement of the Premises, or any part thereof, prior to
any sale or sales thereof to be made pursuant to any provisions herein contained, or to decree,
judgment or order of any court of competent jurisdiction; or, after such sale or sales, claim or
exercise any rights under any statute now or hereafter in force to redeem the property so sold, or
any part thereof, or relating to the marshalling thereof, upon foreclosure sale or other
enforcement hereof; and without limiting the foregoing:

     (a) The Mortgagor hereby expressly waives any and all rights of reinstatement and
redemption, if any, under any order or decree of foreclosure of this Mortgage, on its own
behalf and on behalf of each and every person, it being the intent hereof that any and all
such rights of reinstatement and redemption of the Mortgagor and of all other persons
are and shall be deemed to be hereby waived to the full extent permitted by applicable
law; and

     (b) The Mortgagor will not invoke or utilize any such law or laws or otherwise hinder,
delay or impede the execution of any right, power remedy herein or otherwise granted or
delegated to the Mortgagee but will suffer and permit the execution of every such right,
power and remedy as though no such law or laws had been made or enacted.

	27.	 	Contests.

     Notwithstanding anything to the contrary herein contained, the Mortgagor shall have the right
to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed
upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or
other liens or claims for lien upon the Premises (each, a “Contested Liens”), and no
Contested Lien shall constitute an Event of Default hereunder, if, but only if:

     (a) The Mortgagor shall forthwith give notice of any Contested Lien to the Mortgagee at
the time the same shall be asserted;

     (b) The Mortgagor shall either pay under protest or deposit with the Mortgagee the full
amount (the “Lien Amount”) of such Contested Lien, together with such amount as the
Mortgagee may reasonably estimate as interest or penalties which might arise during the
period of contest; provided that in lieu of such payment the Mortgagor may furnish to the
Mortgagee a bond or title indemnity in such amount and form, and issued by a bond or title
insuring company, as may be satisfactory to the Mortgagee;

     (c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by
appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of
the Premises, and shall permit the Mortgagee to be represented in any such contest and shall
pay all expenses incurred, in so doing, including fees and expenses of the Mortgagee’s
counsel (all of which shall constitute so much additional Indebtedness bearing interest at
the Default Rate until paid, and payable upon demand);

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     (d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with
interest and penalties thereon (i) if and to the extent that any such Contested Lien shall
be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Mortgagee if,
in the reasonable opinion of the Mortgagee, and notwithstanding any such contest, the
Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that
if the Mortgagor shall fail so to do, the Mortgagee may, but shall not be required to, pay
all such Contested Liens and Lien Amounts and interest and penalties thereon and such other
sums as may be necessary in the judgment of the Mortgagee to obtain the release and
discharge of such liens; and any amount expended by the Mortgagee in so doing shall be so
much additional Indebtedness bearing interest at the Default Rate until paid, and payable
upon demand; and provided further that the Mortgagee may in
such case use and apply monies deposited as provided in subsection (b) above and may
demand payment upon any bond or title indemnity furnished as aforesaid.

	28.	 	Expenses Relating to Notes and Mortgage.

     (a) The Mortgagor will pay all expenses, charges, costs and fees relating to the Loan or
necessitated by the terms of the Notes, this Mortgage or any of the other Loan Documents, including
without limitation, the Mortgagee’s reasonable attorneys’ fees in connection with the negotiation,
documentation, administration, servicing and enforcement of the Notes, this Mortgage and the other
Loan Documents, all filing, registration and recording fees, all other expenses incident to the
execution and acknowledgment of this Mortgage and all federal, state, county and municipal taxes,
and other taxes (provided the Mortgagor shall not be required to pay any income or franchise taxes
of the Mortgagee), duties, imposts, assessments and charges arising out of or in connection with
the execution and delivery of the Notes and this Mortgage. The Mortgagor recognizes that, during
the term of this Mortgage, the Mortgagee:

     (i) May be involved in court or administrative proceedings, including, without
restricting the foregoing, foreclosure, probate, bankruptcy, creditors’ arrangements,
insolvency, housing authority and pollution control proceedings of any kind, to which the
Mortgagee shall be a party by reason of the Loan Documents or in which the Loan Documents or
the Premises are involved directly or indirectly;

     (ii) May make preparations following the occurrence of an Event of Default hereunder
for the commencement of any suit for the foreclosure hereof, which may or may not be
actually commenced;

     (iii) May make preparations following the occurrence of an Event of Default hereunder
for, and do work in connection with, the Mortgagee’s taking possession of and managing the
Premises, which event may or may not actually occur;

     (iv) May make preparations for and commence other private or public actions to remedy
an Event of Default hereunder, which other actions may or may not be actually commenced;

25

 

     (v) May enter into negotiations with the Mortgagor or any of its agents, employees or
attorneys in connection with the existence or curing of any Event of Default hereunder, the
sale of the Premises, the assumption of liability for any of the Indebtedness or the
transfer of the Premises in lieu of foreclosure; or

     (vi) May enter into negotiations with the Mortgagor or any of its agents, employees or
attorneys pertaining to the Mortgagee’s approval of actions taken or proposed to be taken by
the Mortgagor which approval is required by the terms of this Mortgage.

     (b) All expenses, charges, costs and fees described in this section shall be so much
additional Indebtedness, shall bear interest from the date so incurred until paid at the Default
Rate and shall be paid, together with said interest, by the Mortgagor forthwith upon demand.

	29.	 	Statement of Indebtedness.

     The Mortgagor, within seven days after being so requested by the Mortgagee, shall furnish a
duly acknowledged written statement setting forth the amount of the debt secured by this Mortgage,
the date to which interest has been paid and stating either that, to the best of the Mortgagor’s
knowledge, no offsets or defenses exist against such debt or, if such offsets or defenses are
alleged to exist, the nature thereof.

	30.	 	Further Instruments.

     Upon request of the Mortgagee, the Mortgagor shall execute, acknowledge and deliver all such
additional instruments and further assurances of title and shall do or cause to be done all such
further acts and things as may reasonably be necessary fully to effectuate the intent of this
Mortgage and of the other Loan Documents.

	31.	 	Additional Indebtedness Secured.

     All persons and entities with any interest in the Premises or about to acquire any such
interest should be aware that this Mortgage secures more than the stated principal amount of the
Notes and interest thereon; this Mortgage secures any and all other amounts which may become due
under the Notes, any of the other Loan Documents or any other document or instrument evidencing,
securing or otherwise affecting the Indebtedness, including, without limitation, any and all
amounts expended by the Mortgagee to operate, manage or maintain the Premises or to otherwise
protect the Premises or the lien of this Mortgage.

	32.	 	Limitation of the Mortgagee’s Liability.

     The Mortgagee shall not be liable for any loss sustained by the Mortgagor resulting from the
Mortgagee’s failure to let the Premises or from any other act or omission of the Mortgagee in
managing, operating or maintaining the Premises following the occurrence of an Event of Default.
The Mortgagee shall not be obligated to observe, perform or discharge, nor does the

26

 

Mortgagee
hereby undertake to observe, perform or discharge any covenant, term, condition or agreement
contained in any Lease to be observed or performed by the landlord thereunder, or any obligation,
duty or liability of the Mortgagor under or by reason of this Mortgage. This Mortgage shall not
operate to place responsibility upon the Mortgagee for the care, control, management or repair of
the Premises or for the carrying out of any of the covenants, terms, conditions and agreements
contained in any Lease, nor shall it operate to make the Mortgagee responsible or liable for any
waste committed upon the Premises by any tenant, occupant or other party, or for any dangerous or
defective condition of the Premises, or for any negligence in the management, upkeep, repair or
control of the Premises resulting in loss or injury or death to any tenant, occupant, licensee,
employee or stranger. Nothing set forth in this Mortgage, and no exercise by the Mortgagee of
any of the rights set forth in this Mortgage, shall constitute or be construed as constituting the
Mortgagee a “mortgagee in possession” of the Premises, in the absence of the taking of actual
possession of the Premises by the Mortgagee pursuant to the provisions hereof.

	33.	 	Indemnity.

     The Mortgagor hereby covenants and agrees that no liability shall be asserted or enforced
against the Mortgagee in the exercise of the rights and powers granted to the Mortgagee in this
Mortgage, and the Mortgagor hereby expressly waives and releases any such liability, except to the
extent resulting from the gross negligence or willful misconduct of the Mortgagee. The Mortgagor
shall indemnify and save the Mortgagee harmless from and against any and all liabilities,
obligations, losses, damages, claims, costs and expenses, including reasonable attorneys’ fees and
court costs (collectively, “Claims”), of whatever kind or nature which may be imposed on,
incurred by or asserted against the Mortgagee at any time by any third party which relate to or
arise from: (a) any suit or proceeding (including probate and bankruptcy proceedings), or the
threat thereof, in or to which the Mortgagee may or does become a party, either as plaintiff or as
a defendant, by reason of this Mortgage or for the purpose of protecting the lien of this Mortgage;
(b) the offer for sale or sale of all or any portion of the Premises; and (c) the ownership,
leasing, use, operation or maintenance of the Premises, if such Claims relate to or arise from
actions taken prior to the surrender of possession of the Premises to the Mortgagee in accordance
with the terms of this Mortgage; provided, however, that the Mortgagor shall not be obligated to
indemnify or hold the Mortgagee harmless from and against any Claims directly arising from the
gross negligence or willful misconduct of the Mortgagee. All costs provided for herein and paid
for by the Mortgagee shall be so much additional Indebtedness and shall become immediately due and
payable upon demand by the Mortgagee and with interest thereon from the date incurred by the
Mortgagee until paid at the Default Rate.

	34.	 	Subordination of Property Manager’s Lien.

     Any property management agreement for the Premises entered into hereafter with a property
manager shall contain a provision whereby the property manager agrees that any and all mechanics’
lien rights that the property manager or anyone claiming by, through or under the property manager
may have in the Premises shall be subject and subordinate to the lien of this Mortgage and shall
provide that the Mortgagee may terminate such agreement, without penalty or cost, at any time after
the occurrence of an Event of Default hereunder. Such property

27

 

management agreement or a short
form thereof, at the Mortgagee’s request, shall be recorded with the Recorder of Deeds of the
county where the Premises are located. In addition, if the property management agreement in
existence as of the date hereof does not contain a subordination provision, the Mortgagor shall
cause the property manager under such agreement to enter into a subordination of the management
agreement with the Mortgagee, in recordable form, whereby such property manager subordinates
present and future lien rights and those of any party claiming by, through or under such property
manager to the lien of this Mortgage.

	35.	 	Compliance with Environmental Laws.

     Concurrently herewith the Mortgagor has executed and delivered to the Mortgagee that certain
Environmental Indemnity Agreement dated as of the date hereof (the “Indemnity”) pursuant to
which the Mortgagor has indemnified the Mortgagee for environmental matters concerning the
Premises, as more particularly described therein. The provisions of the Indemnity are hereby
incorporated herein and this Mortgage shall secure the obligations of the Mortgagor thereunder.

	36.	 	Revolving Loan.

     This Mortgage is given to secure a revolving credit loan and shall secure not only presently
existing indebtedness under the Notes and the other Loan Documents, but also future advances,
whether such advances are obligatory or to be made at the option of the Mortgagee, or otherwise, as
are made within twenty (20) years from the date hereof to the same extent as if such future
advances were made on the date of the execution of this Mortgage, although there may be no advance
made at the time of execution of this Mortgage and although there may be no Indebtedness
outstanding at the time any advance is made. The lien of this Mortgage shall be valid as to all
Indebtedness including future advances, from the time of its filing for record in the recorder’s or
registrar’s office of the county in which the real estate is located. The total amount of
Indebtedness may increase or decrease from time to time, as provided in the Credit Agreement, and
any disbursements which the Mortgagee may make under this Mortgage, the Notes or the Credit
Agreement or any other document with respect hereto (e.g., for payment of taxes, insurance premiums
or other advances to protect the Mortgagee’s liens and security interests, as permitted hereby)
shall be additional Indebtedness secured hereby. This Mortgage is intended to and shall be valid
and have priority over all subsequent liens and encumbrances, including statutory liens, excepting
solely taxes and assessments levied on the real estate, to the extent of the maximum amount secured
hereby.

	37.	 	Remedies Against Other Collateral.

     The Mortgagor hereby acknowledges that certain Loan Documents other than this Mortgage create
liens on collateral located in counties or states other than the counties and state in which the
Premises are located. The Mortgagor further acknowledges that this Mortgage and the other Loan
Documents are cross-defaulted and the Loan secured hereby is also secured by the other Loan
Documents. The Mortgagor agrees that the Mortgagee may proceed, at the same or at different times,
to foreclose any or all liens against such collateral (or sell such collateral under power of sale)
by any proceedings appropriate in the county and state where such

28

 

collateral lies, and that no
event of enforcement taking place in any county or state pursuant to any of the Loan Documents
shall preclude or bar enforcement in any other county or state. Any foreclosure or other
appropriate remedy brought in any county or state in which collateral is located may be brought and
prosecuted as to any part of such collateral without regard to the fact that foreclosure
proceedings or other appropriate remedies have or have not been instituted elsewhere on any other
part of the collateral for the Loan.

	38.	 	Additional Agreements.

     (a) Principles of Construction. In the event of any inconsistencies between the
terms and conditions of this Section 38 and the terms and conditions of this Mortgage, the
terms and conditions of this Section 38 shall control and be binding.

     (b) Collateral Definition. The definition of “Collateral Property” shall also
include all portions of the Property that may not be deemed real property or may not
constitute a “fixture” (within the meaning of Minn. Stat. § 336.9-313 of the Uniform
Commercial Code) and all replacements, substitutions, and additions for and to the same,
whether acquired now or in the future, and all products and cash and non-cash proceeds
thereof.

     (c) Secured Obligations. The following shall be included within the definition
of “Indebtedness” as used in this Mortgage to the extent not already contained therein, and
this Mortgage shall secure the following:

          (i) all sums advanced in protecting the lien of this Mortgage, in payment of taxes on
the Property, and payment of insurance premiums covering improvements thereon, in payment of
principal and interest on prior liens, and payment of expenses and attorneys’ fees herein
provided for and all sums advanced for any other purpose authorized herein or the payment or
performance of other obligations of Borrower under the Notes, this Mortgage and the other
Loan Documents;

          (ii) any and all other charges and amounts payable under the Notes, this Mortgage or
the other Loan Documents, as are exempt from Minnesota mortgage registry tax (the
“Registry Tax”) under Minn. Stat. § 287.035 and under § 287.05, Subd. 4;

          (iii) any and all charges, amounts and non-monetary obligations under the Notes, this
Mortgage or the other Loan Documents, which are not otherwise subject to Registry Tax;

          (iv) any and all charges and amounts payable under the Notes, this Mortgage or the
other Loan Documents on which the Registry Tax has been paid; and

          (v) interest from time to time payable on any or all of the foregoing.

     (d) Minnesota Remedies. If an Event of Default exists, Mortgagee may, at
Mortgagee’s election, exercise any of the following rights, remedies and recourses:

29

 

          (i) Foreclosure and Sale. Foreclose this Mortgage by judicial proceedings or by
advertisement with full authority to sell the Property at public auction and convey the same
to the purchaser in fee simple, either in one parcel or separate lots and parcels, all in
accordance with and in the manner prescribed by law, and out of the proceeds arising from
sale and foreclosure to retain the principal, prepayment fees, and interest due on the
Notes, the indebtedness secured hereby, together with all sums of money as Mortgagee shall
have expended or advanced pursuant to this Mortgage or
pursuant to statute, together with interest thereon as herein provided, and all costs
and expenses of such foreclosure, including lawful attorneys’ fees with the balance, if any,
due to paid to the person entitled thereto by law.

          (ii) Receiver. As a matter of right, without notice and without regard to the
solvency or insolvency of Mortgagor, or the existence of waste of the Property or adequacy
of the security of the Property, and without giving bond, apply for the appointment of a
receiver in accordance with the statutes and law made and provided for who shall have all
the rights, powers and remedies as provided by such statute or law, including without
limitation the rights of receiver pursuant to Minn. Stat. Section 576.01, as amended, and
who shall from the date of its appointment through any period of redemption existing at law
collect the Rents, manage the Property so as to prevent waste, execute leases within or
beyond the period of receivership, pay all expenses for normal maintenance of the Property,
and perform the terms of this Mortgage and apply the Rents to the payment of the expenses
enumerated in Minn. Stat. Section 576.01, Subd. 2 in the priority mentioned therein and to
all expenses for maintenance of the Property and to the costs and expenses of the
receivership, including attorneys’ fees, to the repayment of the indebtedness secured
hereby, whether contained in this Mortgage or in a separate instrument. Mortgagor does
hereby irrevocably consent to such appointment.

     (iii) UCC. Exercise all rights, remedies and recourse available to a secured
party under the Uniform Commercial Code (in addition to the rights available to a mortgagee
of real property), including the right to proceed under the provisions of the Uniform
Commercial Code governing default as to any Collateral Property as defined in this Mortgage
which may be included on the Property or which may be deemed non-realty in a foreclosure of
this Mortgage or to proceed as to such Collateral Property in accordance with the procedures
and remedies available pursuant to a foreclosure of real estate.

     (e) Acknowledgment of Waiver of Hearing Before Sale. Mortgagor understands and
agrees that if an Event of Default shall occur, Mortgagee has the right, inter alia, to
foreclose this Mortgage by advertisement pursuant to Minn. Stat. Chapter 580, as hereafter
amended, or pursuant to any similar or replacement statute hereafter enacted; that if
Mortgagee elects to foreclose by advertisement, it may cause the Property or any part
thereof to be sold at public action; that notice of such sale must be published for six (6)
successive weeks at least once a week in a newspaper of general circulation, and that no
personal notice is required to be served upon Mortgagor. Mortgagor further understands that
upon the occurrence of an Event of Default, Mortgagee may also elect

30

 

its rights under the
Uniform Commercial Code and take possession of the non-real estate items of the Property and
dispose of the same by sale or otherwise in one or more parcels, provided that at least ten
(10) days’ prior notice of such disposition must be given, all as provided for by the
Uniform Commercial Code, as hereinafter amended or by any similar or replacement statute
hereafter enacted. Mortgagor further understands that under the Constitution of the United
States and the Constitution of the State of Minnesota it may have the right to notice and
hearing before the Property may be sold and that the
procedure for foreclosure by advertisement described above does not insure that notice
will be given to Mortgagor and neither said procedure for foreclosure by advertisement nor
the Uniform Commercial Code requires any hearing or other judicial proceeding. MORTGAGOR
HEREBY EXPRESSLY CONSENTS AND AGREES THAT THE PROPERTY MAY BE FORECLOSED BY ADVERTISEMENT
AND THAT THE COLLATERAL PROPERTY MAY BE DISPOSED OF PURSUANT TO THE UNIFORM COMMERCIAL CODE,
ALL AS DESCRIBED ABOVE. MORTGAGOR ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL COUNSEL; THAT
BEFORE SIGNING THIS DOCUMENT THIS SECTION AND MORTGAGOR’S CONSTITUTIONAL RIGHTS WERE FULLY
EXPLAINED BY SUCH COUNSEL AND THAT MORTGAGOR UNDERSTANDS THE NATURE AND EXTENT OF THE RIGHTS
WAIVED HEREBY AND THE EFFECT OF SUCH WAIVER.

     (f) Waiver of Redemption, Notice and Marshalling of Assets. To the fullest
extent permitted by law, Mortgagor hereby irrevocably and unconditionally waives and
releases (a) all benefit that might accrue to Mortgagor by virtue of any present or future
statute of limitations or law or judicial decision exempting the Property from attachment,
levy or sale on execution or providing for any stay of execution, exemption from civil
process, redemption or extension of time for payment, (b) all notices of any Event of
Default or of any election by Mortgagee to exercise or the actual exercise of any right,
remedy or recourse provided for under any of the documents evidencing the Loan and/or
indebtedness secured hereby, (c) any right to a marshalling of assets or a sale in inverse
order of alienation, (d) any appraisal before a sale of any portion of the Property, and (e)
any extension of time for the enforcement and collection of the Notes, the indebtedness
secured hereby, or creating or extending a period of redemption from any sale made in
collecting said debt. To the full extent Mortgagor may do so, Mortgagor agrees that the
Mortgagor will not at any time insist upon, plead, claim or take the benefit or advantage of
any law now or hereafter enforced providing for any appraisal, evaluation, stay, extension
or redemption, and Mortgagor, to the extent permitted by law, waives and releases all rights
of redemption, valuation, appraisal, stay of execution or notice of election to mature or
declare due the whole of this Mortgage.

     (g) Leases and Rents. It is the intention of Mortgagor to establish a present,
absolute and irrevocable transfer and assignment to Mortgagee of all Rents and of all of
Mortgagor’s right, title and interest in, to and under the Leases, and Mortgagor does hereby
appoint irrevocably Mortgagee as Mortgagor’s true and lawful attorney in Mortgagor’s name
and stead, which appointment is coupled with an interest, to collect all said Rents, subject
however, to a revocable license hereby granted by Mortgagee to Mortgagor to collect and
receive all of the Rents, to hold all Rents in trust for the benefit

31

 

of Mortgagee and to
apply all Rents to pay the installments of interest and principal then due and payable under
the Notes and the other amounts then due and payable under the other documents evidencing
the Loan and/or indebtedness secured hereby, and to pay the current costs and expenses of
managing, operating and maintaining the Property, including utilities, taxes and insurance
premiums, tenant improvements and other capital expenditures and to exercise all rights,
power and authority granted to Mortgagee under
the Leases (such license evidenced by Mortgagee’s acceptance of this Mortgage), subject
to the terms and conditions hereof.

          (i) Notwithstanding anything to the contrary herein or in any of the documents
evidencing the Loan to the contrary, the assignment in this Section 38 is an absolute,
unconditional and presently effective assignment and not an assignment for additional
security only; provided, however, upon the occurrence of any Event of Default, Mortgagor’s
revocable license to collect the Rents set forth above and to exercise all rights, power and
authority under the Leases as set forth in this Mortgage shall immediately cease and
terminate. Upon or at any time during the continuance of an Event of Default, including but
not limited to failure of the Mortgagor to pay any of the items set forth below, or if any
material representation or warranty herein proves to be untrue, then the Mortgagee, without
regard to waste, adequacy of the security or solvency of the Mortgagor, may declare all
indebtedness secured hereby immediately due and payable and may, at its option, without
notice:

          (A) in person or by agent, with or without taking possession of or entering the
Property, with or without any action or proceeding, give or require Mortgagor to
give, notice to any or all tenants under any lease authorizing and directing the
tenant to pay such Rents and profits to Mortgagee; collect all of the Rents and
profits; enforce the payment thereof and exercise all of the rights of the landlord
under the leases and all of the rights of Mortgagee hereunder, may enter upon, take
possession of, manage and operate said Property, or any part thereof; may cancel,
enforce or modify the leases, and fix or modify rents, and do any acts which
Mortgagee deems proper to protect the security hereof with or without taking
possession of the Property; and/or

          (B) apply for the appointment of a receiver in accordance with the statutes and
law made and provided for, which receivership Mortgagor hereby consents to, who
shall collect the Rents and profits, and all other income of any kind; manage the
Property so to prevent waste; execute leases within or beyond the period of
receivership, and perform the terms of this Mortgage and apply the Rents and profits
as hereinafter provided.

          (ii) The entering upon and taking possession of the Property, the appointment of a
receiver, the collection of such Rents and profits and the application thereof as aforesaid
shall not cure or waive any Event of Default under this Mortgage nor in any way operate to
prevent Mortgagee from pursuing any other remedy which it may now or hereafter have under
the terms of this Mortgage nor shall it in any way be deemed to constitute Mortgagee a
mortgagee-in-possession. The rights and powers of Mortgagee

32

 

hereunder shall remain in full
force and effect both prior to and after any foreclosure of the Mortgage and any sale
pursuant thereto and until expiration of the period of redemption from said sale, regardless
of whether a deficiency remains from said sale. The purchaser at any foreclosure sale,
including Mortgagee, shall have the right, at any time and without limitation as provided in
Minn. Stat. § 582.03, to advance money to any receiver
appointed hereunder to pay any part or all of the items which the receiver would
otherwise be authorized to pay if cash were available from the Property and the sum so
advanced, with interest as the rate then in effect under the terms of the Notes, shall be a
part of the sum required to be paid to redeem from any foreclosure sale. The rights
hereunder shall in no way be dependent upon and shall apply without regard to whether the
Property is in danger of being lost, materially injured or damaged or whether the Property
is adequate to discharge the Indebtedness.

          (iii) Any Rents collected pursuant to the terms of this Section as described above
shall be applied in the following order: (a) to payment of all fees of any receiver
appointed hereunder; (b) to application of tenant’s security deposits as required by Minn.
Stat. § 504B.178; (c) to payment when due of prior or current real estate taxes or special
assessments with respect to the Property or, if this Mortgage so requires, to the periodic
escrow for payment of taxes or special assessments then due; (d) to payment when due of
insurance premiums of the type required by this Mortgage or, if this Mortgage so required,
to the periodic escrow for the payment of insurance premiums then due; and (e) to payment of
all expenses for normal maintenance of the Property. Any Rents remaining after application
of the above item shall be applied to the Indebtedness on a monthly basis. If the Property
shall be foreclosed and sold pursuant to a foreclosure sale, then:

          (A) if Mortgagee is the purchaser at the foreclosure sale, the Rents shall be
paid to Mortgagee to be applied to the extent of any deficiency remaining after the
sale, the balance to be retained by Mortgagee, and if the Property be redeemed by
Mortgagor or any other party entitled to redeem, to be applied as a credit against
the redemption price with any remaining excess rents to be paid to Mortgagor,
provided, if the Property not be redeemed, any remaining excess rents to belong to
Mortgagee, whether or not a deficiency exists.

          (B) if Mortgagee is not the purchaser at the foreclosure sale, the Rents shall
be paid to Mortgagee to be applied first, to the extent of any deficiency remaining
after the sale, the balance to be retained by the purchaser, and if the Property be
redeemed by Mortgagor or any other party entitled to redeem, to be applied as a
credit against the redemption price with any remaining excess rents to be paid to
Mortgagor, provided, if the Property not be redeemed any remaining excess rents
shall be paid first, to the purchaser at the foreclosure sale in an amount equal to
the interest accrued upon the sale price pursuant to Minn. Stat. §§ 580.23 or
581.10, then to Mortgagee to the extent of any deficiency remaining unpaid and the
remainder to the purchaser.

33

 

Notwithstanding anything to the contrary contained in this Mortgage, this assignment shall
not reduce the indebtedness secured hereby except to the extent that rents, income,
receipts, revenues, issues, profits, and proceeds from the Property are actually received by
Mortgagee and applied to the indebtedness secured hereby. The rights and powers of Mortgagee
and receivers under this Mortgage and the application of Rents under this
Section shall continue until expiration of the redemption period from any foreclosure sale,
whether or not any deficiency remains after a foreclosure sale.

     (h) Fixture Filing. As to those items of Property described in this Mortgage
that are, or are to become fixtures related to the real estate mortgaged herein, and all
products and proceeds thereof, it is intended as to those items that THIS MORTGAGE SHALL BE
EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING from the date of its filing in
the real estate records of the County where the Land is situated. The name of the record
owner of said real estate is Mortgagor set forth in Page 1 to this Mortgage. Information
concerning the security interest created by this instrument may be obtained from Mortgagee,
as secured party, at its address as set forth in Page 1 of this Mortgage. The address of
Mortgagor, as debtor, is as set forth in Page 1 to this Mortgage. This document covers goods
which are or are to become fixtures. Mortgagor is a limited liability company organized
under the laws of the State of Delaware. Mortgagor’s organizational identification number is
set forth in Section 13(j) hereof.

     (i) Business Loan/Non-Agricultural Use. Mortgagor represents and warrants to
Mortgagee that the loan evidenced by the Notes is a business loan transacted solely for the
purpose of carrying on the business of Mortgagor and the Property does not constitute the
homestead of Mortgagor. Mortgagor represents and warrants that as of the date of this
Mortgage the Property is not in agricultural use as defined in Minn. Stat. § 40A.02. Subd. 3
and is not used for agricultural purposes.

     (j) Future Advances. To the extent that this Mortgage is deemed to secure
future advances including, but not limited to, interest as provided in the Credit Agreement,
the amount of such advances is not currently known. The delivery and acceptance of this
Mortgage by Mortgagor and Mortgagee, however, constitutes an acknowledgment that Mortgagor
and Mortgagee are aware of the provisions of Minn. Stat. § 287.05. Subd. 5, and intend to
comply with the requirements contained therein. The maximum principal amount of indebtedness
secured by this Mortgage at any one time, excluding any amounts constituting an
“indeterminate amount” under Minn. Stat. § 287.05. Subd. 5, and excluding advances made by
the Mortgagee in protection of the Mortgaged Property or the lien of this Mortgage, shall be
Twenty Eight Million Dollars ($28,000,000). The representations contained in this Section
are made solely for the benefit of county recording authorities in determining the mortgage
registry tax payable as a prerequisite to the recording of this Mortgage. Mortgagor
acknowledges that such representations do not constitute or imply an agreement by Mortgagee
to make any future advances to Mortgagor.

34

 

     (k) Revolving Line of Credit. This Mortgage shall constitute a Mortgage
securing a revolving line of credit under which advances, payments and readvances may be
made from time to time. The recording of this Mortgage shall serve as notice to parties as
to all advances and readvances secured hereby regardless of the time or amounts of advances,
payments or readvances and whether or not the advances or readvances are obligatory.

     (l) No Effect on Other Instruments. Nothing in this Mortgage and no foreclosure
or enforcement of this Mortgage in any state shall limit or impair any other mortgages,
deeds of trusts or other instrument (collectively, “Other Mortgages”), or any liens, rights
or remedies under or the provisions of any of the Other Mortgages, notwithstanding that this
Mortgage and the Other Mortgages may encumber the same property, and this Mortgage and the
Other Mortgages may be separately foreclosed or otherwise enforced concurrently or in any
order of priority. For purposes of exercising rights and remedies, including but not limited
to foreclosure in a state, all references herein to Mortgaged Property or any component
thereof shall be to the Mortgaged Property or component thereof in that state.

	39.	 	Miscellaneous.

     (a) Successors and Assigns. This Mortgage and all provisions hereof shall be binding
upon and enforceable against the Mortgagor and its assigns and other successors. This Mortgage and
all provisions hereof shall inure to the benefit of the Mortgagee, its successors and assigns and
any holder or holders, from time to time, of the Notes.

     (b) Invalidity of Provisions; Governing Law. In the event that any provision of this
Mortgage is deemed to be invalid by reason of the operation of law, or by reason of the
interpretation placed thereon by any administrative agency or any court, the Mortgagor and the
Mortgagee shall negotiate an equitable adjustment in the provisions of the same in order to effect,
to the maximum extent permitted by law, the purpose of this Mortgage and the validity and
enforceability of the remaining provisions, or portions or applications thereof, shall not be
affected thereby and shall remain in full force and effect. This Mortgage is to be construed in
accordance with and governed by the laws of the State in which the Real Estate is located.

     (c) Municipal Requirements. The Mortgagor shall not by act or omission permit any
building or other improvement on premises not subject to the lien of this Mortgage to rely on the
Premises or any part thereof or any interest therein to fulfill any municipal or governmental
requirement, and the Mortgagor hereby assigns to the Mortgagee any and all rights to give consent
for all or any portion of the Premises or any interest therein to be so used. Similarly, no
building or other improvement on the Premises shall rely on any premises not subject to the lien of
this Mortgage or any interest therein to fulfill any governmental or municipal requirement. Any
act or omission by the Mortgagor which would result in a violation of any of the provisions of this
subsection shall be void.

     (d) Rights of Tenants. The Mortgagee shall have the right and option to commence a
civil action to foreclose this Mortgage and to obtain a decree of foreclosure and sale subject to

35

 

the rights of any tenant or tenants of the Premises having an interest in the Premises prior to
that of the Mortgagee. The failure to join any such tenant or tenants of the Premises as party
defendant or defendants in any such civil action or the failure of any decree of foreclosure and
sale to foreclose their rights shall not be asserted by the Mortgagor as a defense in any civil
action instituted to collect the Indebtedness, or any part thereof or any deficiency remaining
unpaid after
foreclosure and sale of the Premises, any statute or rule of law at any time existing to the
contrary notwithstanding.

     (e) Option of Mortgagee to Subordinate. At the option of the Mortgagee, this Mortgage
shall become subject and subordinate, in whole or in part (but not with respect to priority of
entitlement to insurance proceeds or any condemnation or eminent domain award) to any and all
leases of all or any part of the Premises upon the execution by the Mortgagee of a unilateral
declaration to that effect and the recording thereof in the Office of the Recorder of Deeds in and
for the county wherein the Premises are situated.

     (f) Mortgagee-in-Possession. Nothing herein contained shall be construed as
constituting the Mortgagee a mortgagee-in-possession in the absence of the actual taking of
possession of the Premises by the Mortgagee pursuant to this Mortgage.

     (g) Relationship of Mortgagee and Mortgagor. The Mortgagee shall in no event be
construed for any purpose to be a partner, joint venturer, agent or associate of the Mortgagor or
of any lessee, operator, concessionaire or licensee of the Mortgagor in the conduct of their
respective businesses, and, without limiting the foregoing, the Mortgagee shall not be deemed to be
such partner, joint venturer, agent or associate on account of the Mortgagee becoming a
mortgagee-in-possession or exercising any rights pursuant to this Mortgage, any of the other Loan
Documents, or otherwise. The relationship of the Mortgagor and the Mortgagee hereunder is solely
that of debtor/creditor.

THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

36

 

     (h) Time of the Essence. Time is of the essence of the payment by the Mortgagor of
all amounts due and owing to the Mortgagee under the Notes and the other Loan Documents and the
performance and observance by the Mortgagor of all terms, conditions, obligations and agreements
contained in this Mortgage and the other Loan Documents.

     (i) No Merger. The parties hereto intend that the Mortgage and the lien hereof shall
not merge in fee simple title to the Premises, and if the Mortgagee acquires any additional or
other interest in or to the Premises or the ownership thereof, then, unless a contrary intent is
manifested by the Mortgagee as evidenced by an express statement to that effect in an appropriate
document duly recorded, this Mortgage and the lien hereof shall not merge in the fee simple title
and this Mortgage may be foreclosed as if owned by a stranger to the fee simple title.

     (j) Intentionally Deleted.

     (k) CONSENT TO JURISDICTION. TO INDUCE THE MORTGAGEE TO ACCEPT THE NOTES, THE
MORTGAGOR IRREVOCABLY AGREES THAT, SUBJECT TO THE MORTGAGEE’S SOLE AND ABSOLUTE ELECTION, ALL
ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THE NOTES AND THIS MORTGAGE WILL BE
LITIGATED IN COURTS HAVING SITUS IN HENNEPIN COUNTY. MINNESOTA. THE MORTGAGOR HEREBY CONSENTS AND
SUBMITS TO THE JURISDICTION OF ANY COURT LOCATED WITHIN HENNEPIN COUNTY, MINNESOTA, WAIVES PERSONAL
SERVICE OF PROCESS UPON THE MORTGAGOR, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL DIRECTED TO THE MORTGAGOR AT THE ADDRESS STATED HEREIN AND SERVICE SO MADE WILL BE
DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.

THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

37

 

     (l) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE MORTGAGOR
AND THE MORTGAGEE (BY ACCEPTANCE HEREOF), HAVING BEEN REPRESENTED BY COUNSEL EACH KNOWINGLY AND
VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS (A) UNDER THIS MORTGAGE OR ANY RELATED AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THIS
MORTGAGE OR (B) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS MORTGAGE,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
THE MORTGAGOR AGREES THAT IT WILL NOT ASSERT ANY CLAIM AGAINST THE MORTGAGEE OR ANY OTHER PERSON
INDEMNIFIED UNDER THIS MORTGAGE ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL,
INCIDENTAL OR PUNITIVE DAMAGES.

     (m) Complete Agreement. This Mortgage, the Notes and the other Loan Documents
constitute the complete agreement between the parties with respect to the subject matter hereof and
the Loan Documents may not be modified, altered or amended except by an agreement in writing signed
by both the Mortgagor and the Mortgagee.

THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

38

 

     IN WITNESS WHEREOF, Mortgagor has on the date set forth in the acknowledgment hereto,
effective as of the date first above written, caused this instrument to be duly executed and
delivered by authority duly given.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	AMERICAN MEDICAL SYSTEMS, INC.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	  /s/ Carmen L. Diersen	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Carmen L. Diersen	 	 
	 	 	Title: Executive Vice President, Chief Financial Officer and Secretary	 	 

	 	 	 
	STATE OF MINNESOTA
	 	)
	 
	 	)
	COUNTY OF HENNEPIN
	 	)

     Acknowledged before me in Hennepin County, State of Minnesota, on July 17, 2006, by Carmen L.
Diersen, the Executive Vice President, Chief Financial Officer and Secretary of AMERICAN MEDICAL
SYSTEMS, INC., a Delaware corporation, for the corporation.

	 	 	 
	 

	 	 
	   /s/ Marilyn J. Lamkin
	 	 
	 	 	 
	Notary Public
	 	 
	Name: Marilyn J. Lamkin
	 	 
	 
	 	 
	Wright, County, State of Minnesota
	 	 
	 
	 	 
	My Commission Expires: January 31, 2010
	 	 
	Acting in Hennepin County
	 	 
	 
	 	 
	Drafted by and when recorded mail to:
	 	 
	 
	 	 
	David P. DeYoe
	 	 
	c/o McDermott, Will and Emery, LLP
	 	 
	227 West Monroe Street
	 	 
	Chicago, Illinois 60606
	 	 

39

 

EXHIBIT “A”

LEGAL DESCRIPTION

Lots 5, 6, and 8, Block 4, Opus 2 Ninth Addition

And

Lot 9, Block 4, Opus 2 Ninth Addition, except that part of said Lot 9 legally described as follows:
That part of Lot 9, Block 4, Opus 2 Ninth Addition, described as lying Westerly, Southwesterly and
Southerly of a line described as commencing at the most Southeasterly corner of said Lot 9; thence
Westerly along the South line of said Lot 9 a distance of 100.05 feet to its intersection with a
line 100.00 feet Westerly of and parallel with that particular East line of said Lot 9 that bears
North 2 degrees 44 minutes 49 seconds East from the point of commencement, to the point of
beginning of the line to be described; thence Northerly along said parallel line and its extension
a distance of 107.53 feet; thence Northwesterly, deflecting to the left 40 degrees 12 minutes 51
seconds a distance of 88.84 feet; thence Westerly, deflecting to the left 43 degrees 41 minutes 52
seconds a distance of 299.45 feet to the Southwesterly line of said Lot 9 and said line there
terminating.

Hennepin County, Minnesota

40

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