Document:

exv10w1

 

Exhibit 10.1

PAYMENT AND THE EXERCISE OF REMEDIES WITH RESPECT TO THIS NOTE, AND ANY LIENS SECURING THIS
NOTE, WILL BE SUBJECT TO THE TERMS AND PROVISIONS SET FORTH IN THE SUBORDINATION AGREEMENT
(AS DEFINED BELOW). THE MAKER OF THIS NOTE WILL FURNISH A COPY OF THE SUBORDINATION
AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE UPON WRITTEN REQUEST.

THIS NOTE AND ANY SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY COMPARABLE STATE SECURITIES LAW. EXCEPT
AS EXPRESSLY PROVIDED HEREIN, NEITHER THIS NOTE NOR ANY PORTION HEREOF OR INTEREST HEREIN
(INCLUDING SECURITIES ISSUABLE UPON CONVERSION HEREOF) MAY BE SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THE SAME IS REGISTERED UNDER SAID ACT
AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE AND THE MAKER HAS RECEIVED EVIDENCE OF SUCH EXEMPTION REASONABLY SATISFACTORY TO
THE MAKER.

CONVERTIBLE SENIOR SUBORDINATED SECURED PROMISSORY NOTE

			
	 	 	 
	March 18, 2008
	 	$7,500,000

     FOR VALUE RECEIVED, LOUD Technologies Inc., a Washington corporation (LOUD Technologies Inc.,
together with each other Person which is joined as a “Maker” pursuant to a joinder agreement,
individually and collectively, jointly and severally, the “Maker”) hereby covenants and
promises to pay to Sun Mackie, LLC, a Delaware limited liability company, or its successors and
assigns (the “Payee”) the principal amount of SEVEN MILLION FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($7,500,000), together with interest thereon calculated from the date hereof in
accordance with the provisions of this Note.

     This Note and the indebtedness evidenced hereby are subordinate in the manner and to the
extent set forth in that certain Intercreditor Agreement, dated as of the date hereof, among Payee,
Ableco Finance LLC, a Delaware limited liability company (“Ableco”), as collateral agent
for the Lenders as defined therein (in such capacity, together with any successor collateral agent,
the “Collateral Agent”), and GMAC Commercial Finance LLC (“GMAC”), as
administrative agent for the Lenders defined therein (in such capacity, together with any successor
administrative agent, the “Administrative Agent”; and together with the Collateral Agent,
each an “Agent” and collectively, the “Agents”) (as amended, restated,
supplemented, or otherwise modified from time to time, the “Subordination Agreement”), and
each holder of this Note, by its acceptance hereof, shall be bound by the provisions of the
Subordination Agreement.

     1. Interest.

     (a) Interest Accrual. Interest shall accrue on a quarterly basis at a rate of fifteen
and one-quarter percent (15.25%) per annum (calculated on the basis of a 360-day year comprised of
twelve 30-day months) on the unpaid principal balance of this Note outstanding from time to time,
or (if less) at the highest rate then permitted by applicable law. The Maker shall pay to the

 

 

Payee all accrued and unpaid interest on the Interest Payment Dates, beginning March 31, 2008,
by increasing the principal amount of this Note by the amount of such accrued and unpaid interest
(“PIK Interest”) pursuant to Section 1(b) below. All accrued interest which for
any reason has not theretofore been paid shall be paid in full on the date on which the final
principal payment on this Note is made. Interest shall accrue on any principal payment due under
this Note and, to the extent permitted by applicable law, on any interest which has not been paid
on the date on which it is due and payable until such time as payment therefor is actually
delivered to the Payee. Upon the conversion of all or part of the amounts outstanding under this
Note into Common Stock pursuant to Section 8, interest will cease to accrue with respect to
any such amounts converted into Common Stock.

     (b) PIK Interest; Capitalization of Interest. All interest which accrues on or before
any Interest Payment Date (the “Capitalization Date”) shall be deemed to be paid in kind
and added to the principal amount outstanding hereunder, in each case, as of the Capitalization
Date. Except as expressly provided herein, the term “Note” shall include all PIK Interest deemed
to be added to the principal amount outstanding hereunder pursuant to this Section 1(b).

     2. Principal.

     (a) Maturity Date. On June 29, 2012 (the “Maturity Date”), the Maker shall
pay the entire unpaid principal amount of this Note then outstanding to the Payee, together with
all accrued and unpaid interest thereon.

     (b) Mandatory Prepayment. Subject to the terms of the Subordination Agreement and the
Payee’s right to convert this Note into Common Stock pursuant to Section 8, upon the
occurrence of a Fundamental Change, the Maker shall redeem this Note in full at a price equal to
the unpaid principal amount of the Note, plus all accrued and unpaid interest. Except as provided
in the foregoing sentence, this Note may not be prepaid by the Maker without the consent of the
Majority Payees.

     (c) Replacement Notes. The Maker or the Payee may, but shall not be obligated to,
request the issuance of replacement notes to evidence any increases in the principal amount of this
Note pursuant to Section 1(b) with such replacement notes being identical in form and
substance in all respects to this Note. Upon any such request, the Maker shall issue such
replacement notes and the holder(s) of this Note or such replacement notes shall return such notes
to be replaced to the Maker, in each case marked “cancelled”, or deliver to the Maker a lost note
indemnity in form and substance reasonably satisfactory to the Maker. The replacement and
cancellation of notes pursuant to this Section 2(c) shall in no way be a novation of the
indebtedness evidenced by the notes being replaced and cancelled nor shall the security interests
granted pursuant to any Senior Subordinated Note Document be released, terminated or otherwise
impaired by such replacement and cancellation.

     (d) Application of Principal Payments and Reductions. All payments and prepayments of
principal on this Note and all principal reductions effected in accordance with the terms of this
Note shall be applied first, to the accrued and unpaid interest due under this Note, and
second, to the unpaid principal balance of this Note then outstanding (including principal
attributable to the capitalization of PIK Interest in accordance with Section 1(b)).

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     3. Guarantee. All obligations of the Maker under this Note and the other Senior
Subordinated Note Documents are hereby guaranteed by Mackie Designs Inc., a Washington corporation,
SIA Software Company Inc., a New York corporation, and St. Louis Music, Inc., a Missouri
corporation and each other current or future Domestic Subsidiary of the Maker (collectively,
“Guarantors”) pursuant to the terms set forth on Exhibit A attached hereto and made
a part hereof.

     4. Transaction Fee. In consideration of the loan made pursuant to this Note, and not
in limitation of any other fee paid or payable to the Payee under any of the Senior Subordinated
Note Documents at any time, the Maker shall, on the date hereof, pay to the Payee, or the Payee, at
its option, may set off against the amount loaned to the Maker pursuant to this Note, a fee in the
amount of $150,000, which fee shall be fully earned and payable as of the date hereof and
constitutes part of the Obligations. The Maker agrees that, once paid, the foregoing fee shall be
nonrefundable.

     5. Representations and Warranties. The Maker hereby represents and warrants to the
Payee that each of the representations and warranties set forth in the First Lien Credit Agreement
are true and correct as of the date hereof, and each such representation and warranty is
incorporated mutatis mutandis as if set forth fully in this Note and as if applicable to the Payee
and the Senior Subordinated Note Documents. The Maker further represents and warrants to the Payee
that (a) the execution, delivery and performance of the Senior Subordinated Note Documents to which
the Maker is a party have been duly authorized by the Maker, (b) the Senior Subordinated Note
Documents constitute a valid and binding obligation of the Maker, enforceable in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other laws affecting creditors’ rights generally and limitations on the availability
of equitable remedies, and (c) the execution and delivery by the Maker of the Senior Subordinated
Not Documents to which the Maker is a party, and the fulfillment of and compliance with the
respective terms hereof and thereof by the Maker, do not and shall not (i) conflict with or result
in a breach of the terms of the terms, conditions or provisions of, (ii) constitute a default
under, (iii) result in the creation of any lien, security interest, charge, or encumbrance upon the
Maker’s capital stock or assets pursuant to, (iv) give any third party the right to modify,
accelerate or accelerate any obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption, or other action by or notice to any court or
administrative or governmental body pursuant to, its articles of incorporation or bylaws or any
material law, statute, rule or regulation, including the rules of any stock exchange, to which the
Maker is subject, or any material agreement, instrument, order, judgment or decree to which the
Maker is subject, except where any such condition would not have a material adverse effect on the
Maker.

     6. Covenants.

     (a) Maintenance of the Maker’s Business. So long as any amount remains due and
outstanding under this Note, the Maker will, and will cause each of its Subsidiaries to:

          (i) at all times cause to be done all things necessary to maintain, preserve and renew its
corporate existence (except that a Subsidiary may be merged or liquidated into the

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Maker or another Subsidiary) and all material licenses, authorizations and permits necessary
to the conduct of its businesses;

          (ii) maintain and keep its properties in good repair, working order and condition, and from
time to time make all necessary or desirable repairs, renewals and replacements, so that its
businesses may be properly and advantageously conducted in all material respects at all times;

          (iii) pay and discharge when payable all taxes, assessments and governmental charges imposed
upon its properties or upon the income or profits therefrom (in each case before the same becomes
delinquent and before penalties accrue thereon) and all claims for labor, materials or supplies to
the extent to which the failure to pay or discharge such obligations would reasonably be expected
to have a material adverse effect upon the financial condition, operating results, assets,
operations or business prospects of the Maker and its Subsidiaries taken as a whole, unless and to
the extent that the same are being contested in good faith and by appropriate proceedings and
adequate reserves (as determined in accordance with GAAP) have been established on its books and
financial statements with respect thereto;

          (iv) comply with all other obligations which it incurs pursuant to any contract or agreement,
whether oral or written, express or implied, as such obligations become due to the extent to which
the failure to so comply would reasonably be expected to have a material adverse effect upon the
financial condition, operating results, assets, operations or business prospects of the Maker and
its Subsidiaries taken as a whole, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings and adequate reserves (as determined in accordance with
GAAP) have been established on its books and financial statements with respect thereto;

          (v) comply with all applicable laws, rules and regulations of all governmental authorities,
the violation of which would reasonably be expected to have a material adverse effect upon the
financial condition, operating results, assets, operations or business prospects of the Maker and
its Subsidiaries taken as a whole;

          (vi) apply for and continue in force with good and responsible insurance companies adequate
insurance covering risks of such types and in such amounts as are customary for companies of
similar size engaged in similar lines of business; and

          (vii) maintain proper books of record and account which present fairly in all material
respects its financial condition and results of operations and make provisions on its financial
statements for all such proper reserves as in each case are required in accordance with GAAP.

     (b) SEC Filings. The Maker will file all reports required to be filed by it under the
Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934,
as amended (the “Securities Exchange Act”), and the rules and regulations adopted by the Securities
and Exchange Commission thereunder in a timely and accurate manner. Upon request, the Maker will
deliver to the Payee a written statement as to whether it has complied with such requirements. The
Maker’s failure to file a report required to be filed under the

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Securities Act or the Exchange Act, as the case may be, shall not constitute an Event of
Default (as defined in Section 7 below) hereunder if such failure, in the case of an Exchange Act
filing, is excused by the application of Exchange Act Rule 12b-25.

     (c) Shareholder Approval. The Maker will submit (i) the Senior Subordinated Note
Documents and the transactions contemplated hereby and thereby (including the issuance of shares to
the Payee should the Payee exercise its right to convert this Note into shares of Common Stock
pursuant to Section 8 hereof), and (ii) an amendment to the articles of incorporation of
the Maker increasing the number of authorized shares to an amount sufficient to permit conversion
of this Note pursuant to Section 8 hereof (including PIK Interest) for approval by its
shareholders at the Maker’s next annual shareholders meeting. The Maker shall include in the proxy
statement for such meeting the recommendation of the Special Committee of the Board of Directors
and the Board of Directors of the Maker in favor of the approval of the Proposals and such proxy
statement shall provide that the vote of the shares held by the Payee shall be sufficient for
approval of the Proposals (provided the Payee owns at least 66 2/3% of the outstanding shares of
the Maker on the record date for such meeting). The proxy statement for such annual Meeting shall
be filed with the SEC not later than April 29, 2008 and such meeting held no later than May 31,
2008.

     (d) Audited Financial Statements. The Maker agrees to deliver, or cause to be
delivered, to the Payee the Audited Financial Statements for each Fiscal Year substantially
simultaneously with the delivery thereof to the Administrative Agent and the Lenders under the
First Lien Credit Agreement.

     (e) Notifications of Defaults on First Lien Financing Agreement. As soon as
practicable and in event within two (2) Business Days after giving or receiving any notice that a
default or event of default has occurred under the First Lien Credit Agreement, the Maker will
deliver to the Payee a copy of any such notice.

     (f) Guarantees and Collateral. The Maker will deliver, or cause to delivered, such
guarantees, security agreement, mortgages and other collateral documents as are necessary to
provide the Payee with guarantees by the same entities and security interests in the same assets as
the guarantees and collateral documents delivered pursuant to the First Lien Credit Agreement,
together with such opinions, title insurance policies, endorsements, financing statements, control
agreements (other than to the extent the Collateral Agent is the bailee for the Payee in accordance
with the Subordination Agreement) and other agreements, documents and instruments in furtherance of
such guarantees and collateral arrangements as the Payee may from time to time reasonably request.

     (g) Additional Subsidiary Guarantors. Each Domestic Subsidiary acquired or created
shall as soon as practicable, but in any event within five (5) Business Days after the time it
becomes a guarantor of the obligations under the First Lien Credit Agreement, execute a guaranty in
the form attached hereto as Exhibit A and reasonably satisfactory in form and substance to
the Majority Payees.

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     7. Events of Default; Remedies.

     (a) Events of Default. The term “Event of Default” as used herein means the
occurrence or happening, at any time and from time to time, any of the following:

          (i) the failure of the Maker to pay when due and payable (whether at maturity, upon a
Fundamental Change or otherwise) the full amount of interest then accrued on this Note (including
any PIK Interest) and the full amount of any principal payment on this Note;

          (ii) the occurrence of an Insolvency Event;

          (iii) the failure of the Maker to deliver any shares of Common Stock required to be delivered
by the Maker upon conversion of this Note pursuant to Section 8, which failure is not
remedied within fifteen (15) calendar days of the Payee’s conversion of this Note;

          (iv) the failure of the Maker or any Guarantor to comply with any covenant or agreement
contained in any of the Senior Subordinated Note Documents, which non-compliance is not cured
within fifteen (15) calendar days after receipt of written notice from the Payee; provided,
however, that the Maker shall have sixty (60) calendar days after receipt of written notice to
remedy, or receive a waiver for, any failure to comply with Section 6(b) so long as the
Maker is using commercially reasonable efforts to cure such failure as promptly as reasonably
practicable;

          (v) (A) the failure of the Maker or any of its Subsidiaries to pay in full any principal of or
interest or premium on any of its indebtedness (excluding the obligations hereunder) to the extent
that the aggregate principal amount of all such indebtedness exceeds $1,000,000 when due (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure
shall continue after any applicable grace period, if any, specified in the agreement or instrument
relating to such indebtedness, or (B) any other default under any agreement or instrument relating
to any such indebtedness, or any other event, shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect of such other
default or event is to accelerate the maturity of such indebtedness;

          (vi) a judgment in excess of $1,000,000 is rendered against the Maker or any Subsidiary and,
within 60 days after entry thereof, such judgment is not discharged in full or execution thereof
stayed pending appeal, or within sixty (60) days after the expiration of any such stay, such
judgment is not discharged in full;

          (vii) any representation or warranty made or deemed made by or on behalf of Maker or any
Guarantor or by any officer of the foregoing under or in connection with the Senior Subordinated
Note Documents or under or in connection with any report, certificate, or other document delivered
to any Payee shall have been incorrect in any material respect when made or deemed made;

          (viii) any material provision of this Note, or any other Senior Subordinated Note Document
shall at any time for any reason (other than pursuant to the express terms thereof) cease to be
valid and binding on or enforceable against the Maker or any Guarantor

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intended to be a party
thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a
proceeding shall be commenced by the Maker or any Guarantor or any governmental authority having
jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or
the Maker or any Guarantor shall deny in writing that it has any liability or obligation purported
to be created under this Note, or any other Senior Subordinated Note Document; or

          (ix) any security agreement, any mortgage or any other security document, after delivery
thereof pursuant hereto, shall for any reason fail or cease to create a valid and perfected lien in
favor of the Payee on any Collateral purported to be covered thereby.

     (b) Remedies.

          (i) Subject to the Subordination Agreement, upon the occurrence of an Event of Default, the
Majority Payees may declare all or any portion of the unpaid Obligations to be immediately due and
payable (provided, however, that if an Event of Default specified in Section 7(a)(ii)
occurs, the entire unpaid Obligations shall forthwith become and be immediately due and payable
without any declaration or other act on the part of the Majority Payees).

          (ii) Subject to the Subordination Agreement, upon the occurrence of any Event of Default and
for so long as any Event of Default is continuing, the interest rate on this Note shall increase
immediately by an increment of two (2) percentage points to the extent permitted by law. Any
increase of the interest rate resulting from the operation of this Section 7(b)(ii) shall
terminate as of the close of business on the date on which no Events of Default exist (subject to
subsequent increases pursuant to this Section 7(b)(ii)). All additional interest accrued
pursuant to this Section 7(b)(ii) shall be capitalized on any relevant Capitalization Date
in accordance with Section 1(b).

          (iii) Each Payee shall also have any other rights which such Payee may have been afforded
under any contract or agreement at any time and any other rights which such Payee may have pursuant
to applicable law.

     8. Conversion.

     (a) Conversion Procedure.

          (i) At any time and from time to time prior to the payment of this Note in full, at the
Payee’s option, the Payee may convert all or any portion of the principal amount and accrued and
unpaid interest outstanding under this Note into a number of shares of the Conversion Stock
(excluding any fractional share) determined by dividing the principal amount designated by such
Payee to be converted by the Conversion Price then in effect; provided, that such
conversion may not take place until the Maker’s shareholders (without giving effect to the
conversion contemplated by this Section 8(a)(i)) have approved the issuance of the Common
Stock issuable upon conversion of this Note.

          (ii) Except as otherwise expressly provided herein, each conversion of this Note shall be
deemed to have been effected as of the close of business on the date on which this Note has been
surrendered for conversion at the principal office of the Maker. At such time as

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such conversion
has been effected, the rights of the Payee as the holder of this Note to the extent of the
conversion shall cease, and the Person or Persons in whose name or names any certificate or
certificates for shares of Conversion Stock are to be issued upon such conversion shall be deemed
to have become the holder or holders of record of the shares of Conversion Stock represented
thereby.

          (iii) Notwithstanding any other provision hereof, if a conversion of any portion of this Note
is to be made in connection with a sale of the Maker, the conversion of any portion of this Note
may, at the election of the Payee, be conditioned upon the consummation of the sale of the Maker,
in which case such conversion shall not be deemed to be effective until the consummation of such
transaction.

          (iv) As soon as possible after a conversion has been effected (but in any event within five
(5) Business Days in the case of clause (A) below), the Maker shall deliver to the converting
Payee:

               (A) a certificate or certificates representing the number of shares of Conversion Stock
(excluding any fractional share) issuable by reason of such conversion in such name or names and
such denomination or denominations as the converting Payee has specified; and

               (B) a new Note representing any portion of the principal amount or accrued and unpaid interest
which was represented by the Note surrendered to the Maker in connection with such conversion but
which was not converted.

          (v) If any fractional share of Conversion Stock would, except for the provisions hereof, be
deliverable upon conversion of this Note, the Maker, in lieu of delivering such fractional share,
shall pay an amount equal to the Market Price of such fractional share as of the date of such
conversion.

          (vi) The issuance of certificates for shares of Conversion Stock upon conversion of this Note
shall be made without charge to the Payee hereof for any issuance tax in respect thereof or other
cost incurred by the Maker in connection with such conversion and the related issuance of shares of
Conversion Stock. Upon conversion of this Note, the Maker shall take all such actions as are
necessary in order to insure that the Conversion Stock issuable with respect to such conversion
shall be validly issued, fully paid and nonassessable.

          (vii) The Maker shall not close its books against the transfer of Conversion Stock issued or
issuable upon conversion of this Note in any manner which interferes with the timely conversion of
this Note. The Maker shall assist and cooperate with any Payee required to make any governmental
filings or obtain any governmental approval prior to or in connection with the conversion of this
Note (including, without limitation, making any filings required to be made by the Maker).

          (viii) The Maker shall at all times reserve and keep available out of its authorized but
unissued shares of Conversion Stock, solely for the purpose of issuance upon the conversion of the
Note, such number of shares of Conversion Stock issuable upon the conversion of all outstanding
Notes. All shares of Conversion Stock which are so issuable shall, when

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issued, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and charges. The Maker
shall take all such actions as may be necessary to assure that all such shares of Conversion Stock
may be so issued without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which shares of Conversion Stock may be
listed (except for official notice of issuance which shall be immediately delivered by the Maker
upon each such issuance).

     (b) Conversion Price.

          (i) The initial Conversion Price shall be $5.00 per share of Common Stock. In order to
prevent dilution of the conversion rights granted under the Notes, the Conversion Price shall be
subject to adjustment from time to time pursuant to this Section 8(b).

          (ii) If and whenever the Maker issues or sells, or in accordance with Section 8(c) is
deemed to have issued or sold, any shares of Common Securities for a consideration per share less
than the Conversion Price in effect immediately prior to such time, then immediately upon such
issue or sale the Conversion Price shall be reduced to the Conversion Price determined by dividing
(A) an amount equal to the sum of (x) the product derived by multiplying the Conversion Price in
effect immediately prior to such issue or sale by the number of shares of Common Stock Deemed
Outstanding immediately prior to such issue or sale, plus (y) the consideration, if any, received
by the Maker upon such issue on sale, by (B) the number of shares of Common Stock Deemed
Outstanding immediately after such issue or sale.

     (c) Effect on Conversion Price of Certain Events. For purposes of determining the
adjusted Conversion Price under Section 8(b), the following shall be applicable:

          (i) Issuance of Rights or Options. If the Maker in any manner grants or sells any
Options and the price per share for which Common Securities are issuable upon the exercise of such
Options, or upon conversion or exchange of any Convertible Securities issuable upon exercise of
such Options, is less than the Conversion Price in effect immediately prior to the time of the
granting or sale of such Options, then the total maximum number of shares of Common Securities
issuable upon the exercise of such Options, or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the exercise of such Options, shall be deemed
to be outstanding and to have been issued and sold by the Maker at the time of the granting or sale
of such Option for such price per share. For purposes of this Section 8(c)(i), the “price
per share for which Common Securities are issuable upon exercise of such Options or upon conversion
or exchange of such Convertible Securities” is determined by dividing (A) the total amount, if any,
received or receivable by the Maker as consideration for the granting or sale of such Options, plus
the minimum aggregate amount of additional consideration payable to the Maker upon the exercise of
all such Options, plus in the case of such Options which relate to Convertible Securities, the
minimum aggregate amount of additional consideration, if any, payable to the Maker upon the
issuance or sale of such Convertible Securities and the conversion or exchange thereof, by (B) the
total maximum number of shares of Common Securities issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of
such Options. No adjustment of the Conversion Price shall be made upon the actual issuance of such
Common Securities or of such Convertible Securities upon the exercise of such Options or upon the
actual

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issuance of such Common Securities upon conversion or exchange of such Convertible
Securities.

          (ii) Issuance of Convertible Securities. If the Maker in any manner issues or sells
any Convertible Securities and the price per share for which Common Securities are issuable upon
conversion or exchange thereof is less than the Conversion Price in effect immediately prior to the
time of such issue or sale, then the maximum number of shares of Common Securities issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to be outstanding and to
have been issued and sold by the Maker at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this Section 8(c)(ii), the “price
per share for which Common Securities are issuable upon conversion or exchange thereof” is
determined by dividing (A) the total amount received or receivable by the Maker as consideration
for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Maker upon the conversion or exchange thereof, by
(B) the total maximum number of shares of Common Securities issuable upon the conversion or
exchange of all such Convertible Securities. No adjustment of the Conversion Price shall be made
upon the actual issue of such Common Securities upon conversion or exchange of such Convertible
Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of
any Options for which adjustments of the Conversion Price had been or are to be made pursuant to
other provisions of this Section 8(c), no further adjustment of the Conversion Price shall
be made by reason of such issue or sale.

          (iii) Change in Option Price or Conversion Rate. If the purchase price provided for
in any Option, the additional consideration (if any) payable upon the issue, conversion or exchange
of any Convertible Security, or the rate at which any Convertible Security is convertible into or
exchangeable for Common Securities changes at any time, the Conversion Price in effect at the time
of such change shall be adjusted immediately to the Conversion Price which would have been in
effect at such time had such Option or Convertible Security originally provided for such changed
purchase price, additional consideration or changed conversion rate, as the case may be, at the
time initially granted, issued or sold; provided, that if such adjustment of the Conversion
Price would result in an increase in the Conversion Price then in effect, such adjustment shall not
be effective until thirty (30) calendar days after written notice thereof has been given to all
Payees. For purposes of this Section 8(c), if the terms of any Option or Convertible
Security which was outstanding as of the date of issuance of this Note are changed in the manner
described in the immediately preceding sentence, then such Option or Convertible Security and the
Common Securities deemed issuable upon exercise, conversion or exchange thereof shall be deemed to
have been issued as of the date of such change; provided, that no such change shall at any
time cause the Conversion Price hereunder to be increased.

          (iv) Treatment of Expired Options and Unexercised Convertible Securities. Upon the
expiration of any Option or the termination of any right to convert or exchange any Convertible
Securities without the exercise of such Option or right, the Conversion Price then in effect
hereunder shall be adjusted immediately to the Conversion Price which would have been in effect at
the time of such expiration or termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or termination, never been issued;
provided, that if such expiration or termination would result in an increase in the
Conversion

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Price then in effect, such increase shall not be effective until thirty (30) calendar days
after written notice thereof has been given to all Payees. For purposes of this Section
8(c), the expiration or termination of any Option or Convertible Security which was outstanding
as of the date of issuance of this Note shall not cause the Conversion Price hereunder to be
adjusted unless, and only to the extent that, a change in the terms of such Option or Convertible
Security caused it to be deemed to have been issued after the date of issuance of this Note.

          (v) Calculation of Consideration Received. If any Common Securities, Options or
Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor shall be deemed to be the net amount received by the Maker
therefor. In case any Common Securities, Options or Convertible Securities are issued or sold for
a consideration other than cash, the amount of the consideration other than cash received by the
Maker shall be the fair value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Maker shall be the Market
Price thereof as of the date of receipt. In case any Securities, Options or Convertible Securities
are issued to the owners of the non-surviving entity in connection with any merger in which the
Maker is the surviving entity, the amount of consideration therefor shall be deemed to be the fair
value of the portion of the net assets of the non-surviving entity that is attributable to such
Common Securities, Options or Convertible Securities, as the case may be. The fair value of any
consideration or net assets other than cash and securities (and, if applicable, the portion thereof
attributable to any such stock or securities) shall be determined jointly by the Maker and the
holders of a majority of the outstanding principal amount of the Notes. If such parties are unable
to reach agreement within a reasonable period of time, such fair value shall be determined by an
appraiser jointly selected by the Maker and the holders of a majority of the outstanding principal
amount of the Notes. The determination of such appraiser shall be final and binding upon the
parties, and the fees and expenses of such appraiser shall be borne by the Maker.

          (vi) Integrated Transactions. In case any Option is issued in connection with the
issue or sale of other securities of the Maker, together comprising one integrated transaction in
which no specific consideration is allocated to such Options by the parties thereto, the Options
shall be deemed to have been issued without consideration.

          (vii) Treasury Shares. The number of shares of Common Securities outstanding at any
given time does not include shares owned or held by or for the account of the Maker or any
Subsidiary, and the disposition of any shares so owned or held shall be considered an issue or sale
of Common Securities.

          (viii) Record Date. If the Maker takes a record of the holders of Common Securities
for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common
Securities, Options or in Convertible Securities or (B) to subscribe for or purchase Common
Securities, Options or Convertible Securities, then such record date shall be deemed to be the date
of the issue or sale of the shares of Common Securities deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the date of the granting
of such right of subscription or purchase, as the case may be.

11

 

     (d) Subdivision or Combination of Common Securities. If the Maker at any time
subdivides (by any stock split, stock dividend or otherwise) one or more classes of its outstanding
shares of Common Securities into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision shall be proportionately reduced, and if the Maker at any
time combines (by reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Securities into a smaller number of shares, the Conversion Price in effect immediately
prior to such combination shall be proportionately increased.

     (e) Reorganization, Reclassification, Consolidation, Merger or Sale. Any
recapitalization, reorganization, reclassification, consolidation, merger, sale of all or
substantially all of the Maker’s assets or other transaction, which in each case is effected in
such a manner that holders of Common Securities are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in exchange for Common
Securities is referred to herein as an “Organic Change.” Prior to the consummation of any
Organic Change, the Maker shall make lawful and adequate provision (in form and substance
satisfactory to the holders of a majority of the principal amount of the Notes then outstanding) to
ensure that each of the Payees shall thereafter have the right to acquire and receive, in lieu of
or addition to (as the case may be) shares of Conversion Stock immediately theretofore acquirable
and receivable upon the conversion of such holder’s Note, such shares of stock, securities or
assets as would have been issued or payable in such Organic Change (if the Payee had exercised this
Note immediately prior to such Organic Change) with respect to or in exchange for the number of
shares of Conversion Stock immediately theretofore acquirable and receivable upon conversion of
such Payee’s Note had such Organic Change not taken place. In any such case, appropriate provision
(in form and substance satisfactory to the Majority Payees) shall be made with respect to such
Payee’s rights and interests to insure that the provisions of this Section 8 and
Sections 9 and 10 shall thereafter be applicable in relation to any shares of
stock, securities or assets thereafter deliverable upon the conversion of the Notes (including, in
the case of any such consolidation, merger or sale in which the successor entity or purchasing
entity is other than the Maker, an immediate adjustment of the Conversion Price to the value for
the Common Securities reflected by the terms of such consolidation, merger or sale, and a
corresponding immediate adjustment in the number of shares of Conversion Stock acquirable and
receivable upon conversion of the Notes, if the value so reflected is less than the Conversion
Price in effect immediately prior to such consolidation, merger or sale). The Maker shall not
effect any such consolidation, merger or sale, unless prior to the consummation thereof, the
successor entity (if other than the Maker) resulting from consolidation or merger or the entity
purchasing such assets assumes by written instrument (in form reasonably satisfactory to the
Majority Payees), the obligation to deliver to each such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire.

     (f) Certain Events. If any event occurs of the type contemplated by the provisions of
this Section 8 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or other rights with
equity features), then the Maker’s board of directors shall make an appropriate adjustment in the
Conversion Price so as to protect the rights of the Payees; provided, that no such
adjustment shall increase the Conversion Price as otherwise determined pursuant to this Section
8 or decrease the number of shares of Conversion Stock issuable upon conversion of the Notes
then outstanding.

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     (g) Notices.

          (i) Immediately upon any adjustment of the Conversion Price, the Maker shall send written
notice thereof to the Payee, setting forth in reasonable detail and certifying the calculation of
such adjustment.

          (ii) The Maker shall send written notice to the Payee at least twenty (20) calendar days prior
to the date on which the Maker closes its books or takes a record (A) with respect to any dividend
or distribution upon the Common Securities, (B) with respect to any pro rata subscription offer to
holders of Common Securities or (C) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.

          (iii) The Maker shall also give at least twenty (20) calendar days prior written notice of the
date on which any Organic Change, Fundamental Change, dissolution or liquidation shall take place.

     9. Liquidating Dividends. If the Maker declares a dividend upon the Common Securities
payable otherwise than in cash out of earnings or earned surplus (determined in accordance with
GAAP) except for a stock dividend payable in shares of Common Securities (a “Liquidating
Dividend”), then the Maker shall pay to the Payee at the time of payment thereof the
Liquidating Dividend which would have been paid to the Payee on the Conversion Stock had this Note
been fully converted immediately prior to the date on which a record is taken for such Liquidating
Dividend, or, if no record is taken, the date as of which the record holders of Common Securities
entitled to such dividends are to be determined.

     10. Purchase Rights. If at any time the Maker grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of Common Securities (the “Purchase Rights”), then each
Payee shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which such Payee could have acquired if such Payee had held the number of
shares of Conversion Stock acquirable upon conversion of such Payee’s Note immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no
such record is taken, the date as of which the record holders of Common Securities are to be
determined for the grant, issue or sale of such Purchase Rights.

     11. Registration Agreement. The Maker and the Payee agree and acknowledge that the
shares issuable by the Maker pursuant to Section 8 of this Note are “Sun Registrable
Securities” pursuant to and as defined in that certain Registration Agreement dated February 21,
2003 by and among the Maker, the Payee and the other parties signatory thereto; provided,
that if this Note is assigned pursuant to Section 15 of this Note to any Person other than
an affiliate of Sun Mackie, LLC, such assignee will be deemed a party to such Registration
Agreement and the shares issuable by the Maker pursuant to Section 8 of this Note shall be
“Other Registrable Securities” pursuant to and as defined in such Registration Agreement.

     12. Amendment or Waiver. Except as otherwise expressly provided herein and except as
otherwise expressly provided in the Subordination Agreement, the provisions of this Note may be
amended or waived and the Maker may take any action herein prohibited, or omit

13

 

to perform any act herein required to be performed by it, only if the Maker has obtained the
written consent of the Majority Payees; provided, that, except to the extent specifically
provided for herein, no such action shall change (i) the rate at which or the manner in which
interest accrues on this Note or the times at which such interest becomes payable, (ii) any
provision relating to the scheduled payments or prepayments of principal on this Note, (iii) the
Conversion Price of this Note or the number of shares or the class of stock into which this Note is
convertible or (iv) any provision of this Section 12, without the written consent of 100%
of the Payees.

     13. Definitions. For purposes of this Note, the following capitalized terms have the
following meaning:

     “Ableco” is defined in the second introductory paragraph of this Note.

     “Administrative Agent” is defined in the second introductory paragraph of this Note.

     “Agent” is defined in the second introductory paragraph of this Note.

     “Audited Financial Statements” means, with respect to any Fiscal Year, the
consolidated balance sheets, statements of operations and retained earnings and statements of cash
flows of the Maker and its Subsidiaries as of the end of such Fiscal Year, together with the report
and opinion of the independent certified public accountants for such entities, in each case as
delivered in accordance with the First Lien Credit Agreement.

     “Business Day” means each day other than a Saturday, Sunday or legal holiday in the
States of Delaware and Washington.

     “Capitalization Date” is defined in Section 1(b) of this Note.

     “Collateral” means all of the property and assets and all interests therein and
proceeds thereof now owned or hereafter acquired by any Person upon which a lien or security
interest is granted or purported to be granted by such Person as security for all or any part of
the obligations under this Note or the other Senior Subordinated Note Documents.

     “Collateral Agent” is defined in the second introductory paragraph of this Note.

     “Common Stock” means the common stock, without par value, of the Maker as constituted
on the date hereof and any stock into which any such common stock is changed or any stock resulting
from any stock split, stock dividend or other recapitalization or reclassification of any such
common stock.

     “Common Securities” means Common Stock, and any capital stock of any class of the
Maker hereafter authorized which is not limited to a fixed sum or percentage of par or stated value
in respect of the rights of the holders thereof to participate in dividends or in the distribution
of assets upon any liquidation, dissolution or winding up of the Maker.

     “Common Stock Deemed Outstanding” means, at any given time, the number of shares of
Common Securities actually outstanding at such time, plus the number of shares of Common Securities
deemed to be outstanding pursuant to Sections 8(c)(i) and 8(c)(ii) hereof,
regardless of

14

 

whether or not the Options and Convertible Securities are actually exercisable at such time,
but excluding any shares of Common Stock issuable upon conversion of the Notes.

     “Conversion Price” is defined in Section 8(b) of this Note.

     “Conversion Stock” means shares of the Maker’s authorized but unissued Common Stock;
provided, that if there is a change such that the securities issuable upon conversion of
the Notes are issued by an entity other than the Maker or there is a change in the class of
securities so issuable, then the term “Conversion Stock” shall mean one share of the security
issuable upon conversion of this Note if such security is issuable in shares, or shall mean the
smallest unit in which such security is issuable if such security is not issuable in shares.

     “Convertible Securities” means any stock or securities (directly or indirectly)
convertible into or exchangeable for Common Securities.

     “Domestic” means, with respect to any entity, an entity incorporated or otherwise
organized or existing under the laws of the United States, any state thereof or any territory or
possession of the United States.

     “Event of Default” is defined in Section 7(a) of this Note.

     “First Lien Credit Agreement” means the Financing Agreement dated as of March 30, 2007
by and among the Maker, certain Subsidiaries of the Maker, the lenders from time to time party
thereto, Ableco, as Administrative Agent for such lenders, and GMAC, as Collateral Agent for such
lenders, together with all amendments, restatements, supplements, modifications, renewals,
extensions, refundings, refinancings, deferrals and restructurings thereof.

     “Fiscal Year” means the fiscal year ending on December 31 of each year.

     “Fundamental Change” means the consummation of any transaction or series of
transactions (including any merger, consolidation, recapitalization or restructuring), the result
of which is that (i) Sun Mackie, LLC and its affiliates cease to own 50% or more of the voting
power of the Maker, or in the case of clause (ii), the entity to which the consolidated assets of
the Maker are transferred, (ii) any person or group of related persons unaffiliated with Sun
Mackie, LLC acquires all or substantially all of the assets of the Maker, (iii) the Maker is
liquidated or dissolved, (iv) during any twelve (12)-month period, a majority of the board of
directors of the Maker ceases to be comprised of existing board members at the beginning of the
period and any new directors whose election was approved by at least two-thirds of the directors
then still in office, or (v) any “Change of Control” under or as defined in the First Lien Credit
Agreement.

     “GAAP” means U.S. generally accepted accounting principles consistently applied and as
in effect at the relevant time or the relevant period.

     “GMAC” is defined in the second introductory paragraph of this Note.

     “Guarantor” is defined in Section 3 of this Note.

15

 

     “Insolvency Event” means the occurrence of any of the following: (i) the Maker or any
of its Subsidiaries makes a general assignment for the benefit of creditors; (ii) an order,
judgment or decree is entered adjudicating the Maker or any of its Subsidiaries bankrupt or
insolvent; (iii) any order for relief with respect to the Maker or any of its Subsidiaries is
entered under the Federal Bankruptcy Code; (iv) the Maker or any of its Subsidiaries petitions or
applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of the
Maker or any of its Subsidiaries or of any substantial part of the assets of the Maker or any of
its Subsidiaries, or commences any proceeding relating to the Maker or any of its Subsidiaries
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction; or (v) any such petition or application is filed, or any such
proceeding is commenced, against the Maker or any of its Subsidiaries and not dismissed or stayed
within 60 calendar days after the commencement thereof.

     “Interest Payment Date” means March 31, June 30, September 30 and December 31.

     “Legend” is defined in Section 16(d) of this Note.

     “Liquidating Dividend” is defined in Section 9 of this Note.

     “Majority Payees” means the holders of a majority of then outstanding principal amount
of this Note and any additional notes issued in connection with assignments and transfers permitted
by Section 15.

     “Maker” is defined in the first introductory paragraph of this Note.

     “Market Price” of any security means the average of the closing prices of such
security’s sales on all securities exchanges on which such security may at the time be listed, or,
if there has been no sales on any such exchange on any day, the average of the highest bid and
lowest asked prices on all such exchanges at the end of such day, or, if on any day such security
is not so listed, the average of the representative bid and asked prices quoted in the NASDAQ
System as of 4:00 P.M., New York time, or, if on any day such security is not quoted in the NASDAQ
System, the average of the highest bid and lowest asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of twenty-one (21) Business Days
consisting of the day as of which “Market Price” is being determined and the twenty (20)
consecutive Business Days prior to such day. If at any time such security is not listed on any
securities exchange or quoted in the NASDAQ System or the over-the-counter market, the “Market
Price” shall be the fair value thereof determined jointly by the Maker and the Majority Payees. If
such parties are unable to reach agreement within a reasonable period of time, such fair value
shall be determined by an appraiser jointly selected by the Maker and the Majority Payees. The
determination of such appraiser shall be final and binding upon the parties, and the fees and
expenses of such appraiser shall be borne by the Maker.

     “Maturity Date” is defined in Section 2(a) of this Note.

     “Obligations” means all obligations, liabilities or sums due or to become due by the
Maker or any Guarantor under this Note or any other Senior Subordinated Note Document.

16

 

     “Options” means any rights or options to subscribe for or purchase Common Securities
or Convertible Securities.

     “Organic Change” is defined in Section 8(e) of this Note.

     “Payee” is defined in the first introductory paragraph of this Note.

     “Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political subdivision thereof.

     “PIK Interest” is defined in Section 1(a) of this Note.

     “Purchase Rights” is defined in Section 10 of this Note.

     “Restricted Security” means this Note, all Conversion Stock issuable pursuant to
Section 8 of this Note, and any securities issuable by way of a stock split, stock dividend
or other recapitalization with respect to the Common Stock issuable pursuant to Section 8
of this Note. As to any particular Restricted Securities, such securities shall cease to be
Restricted Securities when they have (a) been effectively registered under the Securities Act and
disposed of in accordance with the registration statement covering them, (b) been distributed to
the public through a broker, dealer or market maker pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act or (c) been otherwise transferred and, if such Restricted
Securities have been certificated, new certificates for them not bearing the Securities Act legend
set forth in Section 16(d) have been delivered by the Maker in accordance with Section
16. Whenever any particular securities of the Maker cease to be Restricted Securities, the
holder thereof shall be entitled to receive from the Maker, without expense, to the extent such
Restricted Security was certificated, new securities of like tenor not bearing a Securities Act
legend of the character set forth in Section 16(d).

     “Securities Act” is defined in Section 6(b) of this Note.

     “Securities Exchange Act” is defined in Section 6(b) of this Note.

     “Senior Subordinated Note Documents” means this Note, the Security Agreement, the
Stock Pledge Agreement, and any other agreement, document or instrument delivered to or in favor of
Payee or any holder in connection with any of the foregoing (to the extent permitted by the First
Lien Credit Agreement).

     “Subsidiary” of any specified Person means any corporation, partnership, limited
liability company, joint venture, association or other business entity, whether now existing or
hereafter organized or acquired, (i) in the case of a corporation, of which more than 50% of the
total voting power of the capital stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, officers or trustees thereof is held by such
first-named Person or any of its Subsidiaries, or (ii) in the case of a partnership, limited
liability company, joint venture, association or other business entity, with respect to which such
first-named Person or any of its Subsidiaries has the power to direct or cause the direction of the
management and

17

 

policies of such entity by contract or otherwise or if in accordance with GAAP such entity is
consolidated with the first-named Person for financial statement purposes.

     “Subordination Agreement” is defined in the second introductory paragraph of this
Note.

     “Transfer” is defined in Section 15 of this Note.

     14. Cancellation. Immediately after all principal and accrued interest at any time
owed on this Note has been paid in full (including by the conversion of one hundred percent (100%)
of the amounts outstanding under this Note into shares of Common Stock, which shares are validly
authorized and issued to the holder), this Note shall be automatically canceled and the Payee shall
immediately surrender this Note to the Maker for cancellation. After cancellation of this Note,
this Note shall not be reissued.

     15. Assignment. The rights and obligations of the Maker and the Payee may not be
assigned by the Maker without the prior written consent of the Majority Payees, which consent may
be granted or withheld in the Majority Payee’s sole discretion. The Payee may assign at any time
this Note to any of its affiliates, any financial institutions or any other Person, in which event,
the assignee shall have, to the extent of such assignment, the same rights and benefits as it would
have if it were the Payee, except as otherwise provided by the terms of such assignment or
participation. Upon a valid assignment of a party’s rights and obligations under this Note, this
Note shall inure to the benefit of and be binding upon the successors and permitted assigns and
transferees of the Maker and the Payee; provided that in no event shall the sale,
exchange, assignment, pledge, hypothecation, transfer or other disposition (each, a
“Transfer”) of this Note relieve the Maker of its obligations hereunder or under any other
Senior Subordinated Note Documents to which it is a party. In the event of any permitted
assignment hereunder, (i) the Maker agrees to pay for all costs associated with documenting,
implementing or otherwise accommodating such Transfer, (ii) the prospective Payee shall be, and
shall provide a representation that it is, entering into such Transfer for its own account and not
with a view to, or for sale in connection with, any subsequent distribution, and (iii) the
prospective Payee shall become a party to this Note (or any replacement hereof) and the
Subordination Agreement.

     16. Securities Law Restrictions.

     (a) This Note is a Restricted Security transferable only pursuant to (i) public offerings
registered under the Securities Act, (ii) Rule 144 or Rule 144A of the Securities and Exchange
Commission (or any similar rule or rules then in force) if such rule is available and (iii) subject
to the conditions specified in Section 16(b) below, any other legally available means of
Transfer.

     (b) In connection with the transfer of any Restricted Securities (other than a Transfer
described in clauses (i) or (ii) of Section 16(a) above), the holder thereof shall deliver
written notice to the Maker describing in reasonable detail the transfer or proposed Transfer,
together with an opinion of counsel knowledgeable in securities law matters to the effect that such
transfer of Restricted Securities may be effected without registration of such Restricted
Securities under the Securities Act. In addition, to the extent the Restricted Securities were
certificated, if the holder of the Restricted Securities delivers to the Maker an opinion of
counsel that such Restricted Securities are not required to contain the Legend, the Maker shall
promptly

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upon such contemplated transfer deliver new certificates for such Restricted Securities which
do not bear the Securities Act legend set forth in Section 16(d). If the Maker is not
required to deliver new certificates without such legend for such Restricted Securities, the
holders shall not transfer the same until the prospective transferee has confirmed to the Maker in
writing his, her, or its agreement to be bound by the conditions contained in this Section
16(b).

     (c) The Maker shall, upon the request of the holder of such Restricted Securities, remove the
legend set forth in Section 16(d) below from the certificates for such Restricted
Securities provided that such holder has previously delivered to the Maker an opinion of counsel
that such Restricted Securities no longer require the Legend. Each opinion of counsel delivered to
the Maker under this Section 16 shall be in form and substance reasonably satisfactory to
the Maker.

     (d) Each certificate or instrument representing Restricted Securities, if any, shall be
imprinted with a legend in substantially the following form (the “Legend”):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY COMPARABLE STATE
SECURITIES LAW, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THE SAME IS REGISTERED
UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND THE MAKER HAS
RECEIVED EVIDENCE OF SUCH EXEMPTION REASONABLY SATISFACTORY TO THE
MAKER.

     17. Payments; Place of Payment. All payments to be made to the Payee shall be made in
the lawful money of the United States of America in immediately available funds.

     18. Place of Payments. Payments of principal and interest shall be delivered as
directed by prior written notice by the Payee to the Maker or, if not specified by such Payee, then
to such Payee, at the address of such Payee set forth on the Maker’s records or at such other
address as is specified by prior written notice by such Payee to the Maker.

     19. Governing Law. All questions concerning the construction, validity and
interpretation of this Note will be governed by and construed in accordance with the domestic laws
of the State of New York, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.

     20. Waiver of Presentment, Demand and Dishonor. The Maker hereby waives presentment
for payment, protest, demand, notice of protest, notice of nonpayment and diligence with respect to
this Note, and waives and renounces all rights to the benefits of any statute of limitations or any
moratorium, appraisement, exemption, or homestead now provided or that hereafter may be provided by
any federal or applicable state statute, including but not limited to exemptions provided by or
allowed under the Federal Bankruptcy Code, both as to itself and as

19

 

to all of its property, whether real or personal, against the enforcement and collection of
the Obligations and any and all extensions, renewals, and modifications hereof.

     21. Expenses; Taxes; Attorneys Fees. The Maker will pay on demand, all costs and
expenses incurred by or on behalf of each Payee, including reasonable fees, costs, client charges
and expenses of a single counsel selected by the Majority Payees for the collective interests of
the Payees, accounting, due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of Collateral, title
searches and reviewing environmental assessments, miscellaneous disbursements, examination, travel,
lodging and meals, arising from or relating to: (a) the negotiation, preparation, execution,
delivery, performance and administration of this Note and any other Senior Subordinated Note
Document, (b) any requested amendments, waivers or consents to this Note or any other Senior
Subordinated Note Document whether or not such documents become effective or are given, (c) the
preservation and protection of any Payee’s rights under this Note or any other Senior Subordinated
Note Document, (d) the defense of any claim or action asserted or brought against any Payee by any
Person that arises from or relates to this Note or any other Senior Subordinated Note Document or
any Payee’s claims against the Maker or any Guarantor, or any and all matters in connection
therewith, (e) the commencement or defense of, or intervention in, any court proceeding arising
from or related to this Note or any other Senior Subordinated Note Document, (f) the filing of any
petition, complaint, answer, motion or other pleading by any Payee, or the taking of any action in
respect of the Collateral or other security, in connection with this Note or any other Senior
Subordinated Note Document, (g) the protection, collection, lease, sale, taking possession of or
liquidation of, any Collateral or other security in connection with this Note or any other Senior
Subordinated Note Document, (h) any attempt to enforce any lien or security interest in any
Collateral or other security in connection with this Note or any other Senior Subordinated Note
Document, (i) any attempt to collect from the Maker or any Guarantor, (j) all liabilities and costs
arising from or in connection with the past, present or future operations of the Maker or any
Guarantor involving any damage to real or personal property or natural resources or harm or injury
alleged to have resulted from any release of hazardous materials on, upon or into such property, or
(k) the receipt by any Payee of any advice from professionals with respect to any of the foregoing.
Without limitation of the foregoing or any other provision of any Senior Subordinated Note
Document: (x) the Maker agrees to pay all stamp, document, transfer, recording or filing taxes or
fees and similar impositions now or hereafter determined by any Payee to be payable in connection
with this Note or any other Senior Subordinated Note Document, and the Maker agrees to save each
Payee harmless from and against any and all present or future claims, liabilities or losses with
respect to or resulting from any omission to pay or delay in paying any such taxes, fees or
impositions, (y) the Maker agrees to pay all broker fees that may become due in connection with the
transactions contemplated by this Note and the other Senior Subordinated Note Documents, and (z) if
the Maker fails to perform any covenant or agreement contained herein or in any other Senior
Subordinated Note Document, the Payee may itself perform or cause performance of such covenant or
agreement, and the expenses of the Payee incurred in connection therewith shall be reimbursed on
demand by the Maker.

     22. Business Days. If any payment is due, or any time period for giving notice or
taking action expires, on a day which is not a Business Day, the payment shall be due and payable
on, and the time period shall automatically be extended to, the immediately following

20

 

Business Day, and interest shall continue to accrue at the required rate hereunder until any such
payment is made.

     23. Waiver of Jury Trial. EACH OF THE MAKER AND THE HOLDER OF THIS NOTE, BY ISSUING OR
ACCEPTING THIS NOTE, AS APPLICABLE, AGREES THAT IT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY RIGHT TO JURY TRIAL OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (A) ARISING UNDER
THIS NOTE OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS IN RESPECT OF
THIS NOTE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT,
EQUITY, OR OTHERWISE. Each of the Maker and the Payee, by accepting this Note, hereby agrees and
consents that any such claim, demand, action, or cause of action shall be decided by court trial
without a jury and that each Payee and the Maker may file an original counterpart of a copy of this
Note with any court as written evidence of the consent of the Payee or the Maker to the waiver of
the Payee’s right to trial by jury.

     24. No Waiver. The rights and remedies of the Payee expressly set forth in this Note
are cumulative and in addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of the Payee in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise thereof or the exercise
of any other right, power or privilege or be construed to be a waiver of any Event of Default. No
course of dealing between the Maker and the Payee or their agents or employees shall be effective
to amend, modify or discharge any provision of this Note or to constitute a waiver of any Event of
Default. No notice to or demand upon Maker in any case shall entitle Maker to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the right of the Payee
to exercise any right or remedy or take any other or further action in any circumstances without
notice or demand.

     25. Construction. The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation,” whether or not so
expressly stated in each such instance and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The word “will” shall be construed to have
the same meaning and effect as the word “shall.” Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and
words of similar import, shall be construed to refer to this Note in its entirety and not to any
particular provision hereof, (d) all references herein to Sections shall be construed to refer to
Sections of this Note and (e) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract

21

 

rights. Unless otherwise expressly provided herein, each accounting term used herein shall
have the meaning given it under GAAP.

     26. Usury Laws. It is the intention of the Maker and each Payee to conform strictly
to all applicable usury laws now or hereafter in force, and any interest payable under this Note
shall be subject to reduction to the amount not in excess of the maximum legal amount allowed under
the applicable usury laws as now or hereafter construed by the courts having jurisdiction over such
matters. If the maturity of this Note is accelerated by reason of an election by the Payee
resulting from an Event of Default, voluntary prepayment by the Maker or otherwise, then earned
interest may never include more than the maximum amount permitted by law, computed from the date
hereof until payment, and any interest in excess of the maximum amount permitted by law shall be
canceled automatically and, if theretofore paid, shall at the option of the Payee either be rebated
to the Maker or credited on the principal amount of this Note, or if this Note has been paid, then
the excess shall be rebated to the Maker. The aggregate of all interest (whether designated as
interest, service charges, points or otherwise) contracted for, chargeable, or receivable under
this Note shall under no circumstances exceed the maximum legal rate upon the unpaid principal
balance of this Note remaining unpaid from time to time. If such interest does exceed the maximum
legal rate, it shall be deemed a mistake and such excess shall be canceled automatically and, if
theretofore paid, rebated to the Maker or credited on the principal amount of this Note, or if this
Note has been repaid, then such excess shall be rebated to the Maker.

* * * * *

22

 

     IN WITNESS WHEREOF, the Maker has executed and delivered this Convertible Senior Subordinated
Secured Promissory Note on the date first above written.

	 	 	 	 	 	 	 
	 	 	LOUD TECHNOLOGIES INC., a Washington corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Its:
	 	 

	 	 
	 

	 	 	 	 	 	 

Agreed to and accepted this                      day of                     , 2008

SUN MACKIE, LLC, a Delaware limited liability company

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	Its:

	 	 

	 	 
	 

	 	 	 	 

Signature Page to Convertible Senior Subordinated Promissory Note

 

 

EXHIBIT A

GUARANTY

     1. Guaranty. Each Guarantor hereby jointly and severally unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration
or otherwise, of all obligations of the Maker now or hereafter existing under any Senior
Subordinated Note Document, whether for principal, interest (including all interest that accrues
after the commencement of any Insolvency Event irrespective of whether a claim therefor is allowed
in such case or proceeding), fees, expenses or otherwise (such obligations, to the extent not paid
by the Maker, being the “Guaranteed Obligations”), and agrees to pay any and all expenses
(including reasonable counsel fees and expenses) incurred by the holders (or any of them) in
enforcing any rights under the guaranty set forth in this Exhibit. Without limiting the generality
of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of
the Guaranteed Obligations and would be owed by the Maker to the holders under any Senior
Subordinated Note Document but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving any Maker or Guarantor.

     2. Guaranty Absolute. Each Guarantor jointly and severally guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the Senior
Subordinated Note Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the holders with respect thereto.
Each Guarantor agrees that this Exhibit constitutes a guaranty of payment when due and not of
collection and waives any right to require that any resort be made by any holder to any Collateral.
The obligations of each Guarantor under this Exhibit are independent of the Guaranteed
Obligations, and a separate action or actions may be brought and prosecuted against each Guarantor
to enforce such obligations, irrespective of whether any action is brought against the Maker or any
Guarantor or whether the Maker or any Guarantor is joined in any such action or actions. The
liability of each Guarantor under this Exhibit shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter
have in any way relating to, any or all of the following:

(a) any lack of validity or enforceability of any Senior Subordinated Note Document
or any agreement or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term of,
all or any of the Guaranteed Obligations, or any other amendment or waiver of or any
consent to departure from any Senior Subordinated Note Document, including any
increase in the Guaranteed Obligations resulting from the extension of additional
credit to the Maker or any Guarantor or otherwise;

(c) any taking, exchange, release or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;

 

 

(d) the existence of any claim, set-off, defense or other right that any Guarantor
may have at any time against any Person, including, without limitation, any holder;

(e) any change, restructuring or termination of the corporate, limited liability
company or partnership structure or existence of the Maker or any Guarantor; or

(f) any other circumstance (including any statute of limitations) or any existence
of or reliance on any representation by any holder that might otherwise constitute a
defense available to, or a discharge of, the Maker, any Guarantor or any other
guarantor or surety.

This Exhibit shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the
holders or any other Person upon the insolvency, bankruptcy or reorganization of the Maker or
otherwise, all as though such payment had not been made.

     3. Waiver. Each Guarantor hereby waives (i) promptness and diligence, (ii) notice of
acceptance and any other notice with respect to any of the Guaranteed Obligations and this Exhibit
and any requirement that the holders exhaust any right or take any action against the Maker or any
Guarantor or any other Person or any Collateral, (iii) any right to compel or direct any holder to
seek payment or recovery of any amounts owed under this Exhibit from any one particular fund or
source or to exhaust any right or take any action against the Maker or any Guarantor, any other
Person or any Collateral, (iv) any requirement that any holder protect, secure, perfect or insure
any security interest or Lien on any property subject thereto or exhaust any right to take any
action against the Maker or any Guarantor, any other Person or any Collateral, and (v) any other
defense available to any Guarantor. Each Guarantor agrees that the holders shall have no
obligation to marshal any assets in favor of any Guarantor or against, or in payment of, any or all
of the Obligations. Each Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated herein and that the waiver set forth in this
Section 3 is knowingly made in contemplation of such benefits. Each Guarantor hereby
waives any right to revoke this Exhibit, and acknowledges that this Exhibit is continuing in nature
and applies to all Guaranteed Obligations, whether existing now or in the future.

     4. Continuing Guaranty; Assignments. This Exhibit is a continuing guaranty and shall
(a) remain in full force and effect until the later of (i) the cash payment in full of the
Guaranteed Obligations (other than indemnification obligations as to which no claim has been made)
and all other amounts payable under this Exhibit and (ii) the Maturity Date, (b) be binding upon
each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by
the holders and their successors, pledgees, transferees and assigns.

     5. Subrogation. Each Guarantor will not exercise any rights that it may now or
hereafter acquire against the Maker or any Guarantor or any other guarantor that arise from the
existence, payment, performance or enforcement of the Guarantor’s obligations under this Exhibit,
including any right of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the holders against the Maker or any

2

 

Guarantor or any other guarantor or any Collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including the right to take or receive
from the Maker or any Guarantor or any other guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security solely on account of such claim,
remedy or right. If any amount shall be paid to any Guarantor in violation of the immediately
preceding sentence, such amount shall be held in trust for the benefit of the holders shall
forthwith be paid to the holders to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this Exhibit, whether matured or unmatured, in accordance with the
terms of this Note, or to be held as Collateral for any Guaranteed Obligations or other amounts
payable under this Exhibit thereafter arising. If (i) any Guarantor shall make payment to the
holders of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations
and all other amounts payable under this Exhibit shall be paid in full in cash and (iii) all
commitments under the Subordinated Note Documents have been terminated, the holders will, at any
Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence the transfer by
subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor.

     6. Conflict. Anything herein to the contrary notwithstanding, the obligations
evidenced hereby, the exercise of any right or remedy with respect thereto, and certain of the
rights of the holder hereof are subject to the provisions of the Intercreditor Agreement, dated as
of the date hereof, among Ableco Finance LLC, as Collateral Agent, GMAC Commercial Finance LLC, as
Administrative Agent, and the Payee. In the event of any conflict between the terms of the
Subordination Agreement and this Agreement, the terms of the Subordination Agreement shall govern
and control.

     7. Release of Guarantor. A Guarantor shall be released from all obligations under its
Guaranty if (a) the Guarantor has sold all of its assets or the Company and its Subsidiaries have
sold all the capital stock of the Guarantor owned by them, or (b) the Guarantor merges with or into
or consolidates with or transfers all or substantially all of its assets to the Maker or another
Guarantor.

3

 

     IN WITNESS WHEREOF, the Guarantors have executed and delivered this Guaranty on the
                                        , 2008.

	 	 	 	 	 	 	 
	 	 	MACKIE DESIGNS INC., a Washington corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SIA SOFTWARE COMPANY INC., a New York corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ST. LOUIS MUSIC, INC., a Missouri corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 

Signature Page to Guaranty

4exv10w2

 

Exhibit 10.2

SECURITY AGREEMENT

     This SECURITY AGREEMENT (this “Agreement”) is made this 18 day of March 2008, by and
among LOUD TECHNOLOGIES INC., a Washington corporation, the other Grantors listed on the signature
pages hereto and those additional entities that hereafter become parties hereto by executing the
form of Supplement attached hereto as Annex 1 (collectively, jointly and severally,
“Grantors” and each individually, “Grantor”), and Sun Mackie, LLC, a Delaware
limited liability company (together with its successors and assigns, if any, in such capacity
“Secured Party”).

W I T N E S S E T H:

     WHEREAS, that certain Convertible Senior Secured Subordinated Promissory Note dated March
___, 2008 (as amended, restated, supplemented or otherwise modified from time to time, including
all exhibits and schedules thereto, the “Subordinated Note”) executed by LOUD TECHNOLOGIES
INC. a Delaware limited liability company (“Borrower”) is issued in favor of the Secured
Party and pursuant to the Subordinated Note, each of the Grantors listed on the signature pages
hereto has guaranteed the obligations of the Borrower in favor of the Secured Party, and

     WHEREAS, in order to induce the Secured Party to enter into the Subordinated Note, Grantors
have agreed to grant a continuing security interest in and to the Collateral in order to secure the
prompt and complete payment, observance and performance of, among other things, all of the present
and future obligations of Borrower arising from the Subordinated Note, including reasonable out of
pocket attorneys fees and expenses and any interest fees or expenses due and owing pursuant to this
Agreement or the Subordinated Note that accrue after the filing of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any Insolvency
Proceeding (the “Secured Obligations”).

     NOW, THEREFORE, for and in consideration of the recitals made above and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

     1. Defined Terms. All capitalized terms used herein (including in the preamble and
recitals hereof) without definition shall have the meanings ascribed thereto in the Financing
Agreement. Any terms used in this Agreement that are defined in the Code shall be construed and
defined as set forth in the Code unless otherwise defined herein or in the Financing Agreement;
provided, however, that to the extent that the Code is used to define any term
herein and such term is defined differently in different Articles of the Code, the definition of
such term contained in Article 9 of the Code shall govern. In addition to those terms defined
elsewhere in this Agreement, as used in this Agreement, the following terms shall have the
following meanings:

          (a) “Account” means an account (as that term is defined in Article 9 of the Code).

          (b) “Account Debtor” means any Person who is obligated on an Account, chattel paper,
or a general intangible.

          (c) “Books” means books and records (including each Grantor’s Records indicating,
summarizing, or evidencing such Grantor’s assets (including the Collateral) or liabilities, each
Grantor’s

 

 

Records relating to such Grantor’s business operations or financial condition, and each
Grantor’s goods or General Intangibles related to such information).

          (d) “Borrower” has the meaning specified therefor in the recitals to this Agreement.

          (e) “Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. § 101,
et seq.), as amended, and any successor statute.

          (f) “Capital Stock” has the meaning specified therefor in the Financing Agreement.

          (g) “Cash and Cash Equivalents” has the meaning specified therefor in the Financing
Agreement.

          (h) “CFC” means a “Controlled Foreign Corporation” as defined in the Internal Revenue
Code.

          (i) “Chattel Paper” means chattel paper (as that term is defined in the Code) and
includes tangible chattel paper and electronic chattel paper.

          (j) “Code” means the New York Uniform Commercial Code, as in effect from time to time;
provided, however, that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection, priority, or remedies with respect to Secured Party’s Lien on any
Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction
other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to
such attachment, perfection, priority, or remedies.

          (k) “Collateral” has the meaning specified therefor in Section 2 hereof.

          (l) “Commercial Tort Claims” means commercial tort claims (as that term is defined in
the Code) and includes those commercial tort claims listed on Schedule 6 attached hereto.

          (m) “Control Agreement” means each control agreement, in form and substance customary
for such agreements and reasonably satisfactory to Secured Party, executed and delivered by
Grantors or one of their Subsidiaries, Secured Party, and the applicable securities intermediary
(with respect to a Securities Account) or bank (with respect to a Deposit Account).

          (n) “Copyrights” means any and all copyrights and copyright registrations, including
(i) the copyright registrations and recordings thereof and all applications in connection therewith
listed on Schedule 1 attached hereto and made a part hereof, (ii) all reissues,
continuations, extensions or renewals thereof, (iii) all income, royalties, damages and payments
now and hereafter due or payable under and with respect thereto, including, payments under all
licenses entered into in connection therewith and damages and payments for past or future
infringements thereof, (iv) the right to sue for past, present and future infringements thereof,
(v) the goodwill of each Grantor’s business symbolized by the foregoing and connected therewith,
and (vi) all of each Grantor’s rights corresponding thereto throughout the world.

          (o) “Copyright Security Agreement” means each Copyright Security Agreement among
Grantors, or any of them, and Secured Party, in substantially the form of Exhibit A
attached hereto, pursuant to which Grantors have granted to Secured Party a security interest in
all their respective Copyrights.

2

 

          (p) “Deposit Account” means a “deposit account” (as that term is defined in the Code).

          (q) “Equipment” means “equipment” (as that term is defined in the Code) and includes
machinery, machine tools, motors, furniture, furnishings, fixtures, vehicles (including motor
vehicles), computer hardware, tools, parts, and goods (other than consumer goods, farm products, or
Inventory), wherever located, including all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.

          (r) “Event of Default” means an Event of Default as defined in the Subordinated Note.

          (s) “Financing Agreement” means that certain Financing Agreement, dated as of the date
hereof, by and among Borrower, certain of the Grantors, Guarantor, Ableco Finance LLC and the
lenders from time to time party thereto.

          (t) “General Intangibles” means general intangibles (as that term is defined in the
Code) and includes payment intangibles, contract rights, rights to payment, rights arising under
common law, statutes, or regulations, choses or things in action, goodwill (including the goodwill
associated with any Trademark, Patent, or Copyright), Patents, Trademarks, Copyrights, URLs and
domain names, industrial designs, other industrial or Intellectual Property or rights therein or
applications therefor, whether under license or otherwise, programs, programming materials,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension
funds, route lists, rights to payment and other rights under any royalty or licensing agreements,
including Intellectual Property Licenses, infringement claims, computer programs, information
contained on computer disks or tapes, software, literature, reports, catalogs, pension plan
refunds, pension plan refund claims, insurance premium rebates, tax refunds, and tax refund claims,
interests in a partnership or limited liability company which do not constitute a security under
Article 8 of the Code, and any other personal property other than Commercial Tort Claims, money,
Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related Property, Negotiable
Collateral, and oil, gas, or other minerals before extraction.

          (u) “Governmental Authority” means any nation or government, any federal, state, city,
town, municipality, county, local or other political subdivision thereof or thereto and any
department, commission, board, bureau, instrumentality, agency or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

          (v) “Grantor” and “Grantors” have the respective meanings specified therefor
in the recitals to this Agreement.

          (w) “Guarantor” means a Grantor which is not a Borrower.

          (x) “Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency law,
assignments for the benefit of creditors, formal or informal moratoria, compositions, or extensions
generally with creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.

          (y) “Intellectual Property” means any and all Intellectual Property Licenses, Patents,
Copyrights, Trademarks, the goodwill associated with such Trademarks, trade secrets and customer
lists.

          (z) “Intellectual Property Licenses” means rights under or interests in any patent,
trademark, copyright or other intellectual property, including software license agreements with any
other

3

 

party, whether the applicable Grantor is a licensee or licensor under any such license
agreement (but excluding any off-the-shelf software license agreement), including the license
agreements listed on Schedule 2 attached hereto and made a part hereof, and the right to
use the foregoing in connection with the enforcement of the Secured Party’s rights under the
Subordinated Note, including, but not limited to the right to prepare for sale and to sell any and
all Inventory and Equipment now or hereafter owned by any Grantor and now or hereafter covered by
such licenses.

          (aa) “Inventory” means inventory (as that term is defined in the Code).

          (bb) “Investment Related Property” means (i) any and all investment property (as that
term is defined in the Code), and (ii) any and all of the following regardless of whether
classified as investment property under the Code: all Pledged Interests, Pledged Operating
Agreements, and Pledged Partnership Agreements.

          (cc) “Lien” means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, charge or other encumbrance or security or preferential arrangement of any
nature, including any conditional sale or title retention arrangement, any capitalized lease and
any assignment, deposit arrangement or financing lease intended as, or having the effect of,
security.

          (dd) “Negotiable Collateral” means letters of credit, letter of credit rights,
instruments, promissory notes, drafts and documents (as that term is defined in the Code).

          (ee) “Patents” means any and all patents and patent applications, including, (i) the
patents and patent applications listed on Schedule 3 attached hereto and made a part
hereof, (ii) all renewals thereof, (iii) all income, royalties, damages and payments now and
hereafter due or payable under and with respect thereto, including, payments under all licenses
entered into in connection therewith and damages and payments for past or future infringements
thereof, (iv) the right to sue for past, present and future infringements thereof, and (v) all of
each Grantor’s rights corresponding thereto throughout the world.

          (ff) “Patent Security Agreement” means each Patent Security Agreement among Grantors,
or any of them, and Secured Party, in substantially the form of Exhibit B attached hereto,
pursuant to which Grantors have granted to Secured Party, a security interest in all their
respective Patents.

          (gg) “Permitted Liens” has the meaning specified therefor in the Financing Agreement.

          (hh) “Person” has the meaning specified therefor in the Financing Agreement.

          (ii) “Pledged Companies” means, each Person listed on Schedule 4 hereto as a
“Pledged Company”, together with each other Person, all or a portion of whose Capital Stock, is
acquired or otherwise owned by a Grantor after the date hereof.

          (jj) “Pledged Interests” means all of each Grantor’s right, title and interest in and
to all of the Capital Stock now or hereafter owned by such Grantor, regardless of class or
designation, including in each of the Pledged Companies, and all substitutions therefor and
replacements thereof, all proceeds thereof and all rights relating thereto, including any
certificates representing the Capital Stock, the right to request after the occurrence and during
the continuation of an Event of Default that such Capital Stock be registered in the name of
Secured Party or any of its nominees, the right to receive any certificates representing any of the
Capital Stock and the right to require that such certificates be delivered

4

 

to Secured Party together with undated powers or assignments of investment securities with
respect thereto, duly endorsed in blank by such Grantor, all warrants, options, share appreciation
rights and other rights, contractual or otherwise, in respect thereof and of all dividends,
distributions of income, profits, surplus, or other compensation by way of income or liquidating
distributions, in cash or in kind, and all cash, instruments, and other property from time to time
received, receivable, or otherwise distributed in respect of or in addition to, in substitution of,
on account of, or in exchange for any or all of the foregoing.

          (kk) “Pledged Interests Addendum” means a Pledged Interests Addendum substantially in
the form of Exhibit C to this Agreement.

          (ll) “Pledged Note” means any promissory note (as that term is defined in the Code)
issued in favor of any of the Grantors.

          (mm) “Pledged Operating Agreements” means all of each Grantor’s rights, powers, and
remedies under the limited liability company operating agreements of each of the Pledged Companies
that is a limited liability company.

          (nn) “Pledged Partnership Agreements” means all of each Grantor’s rights, powers, and
remedies under the partnership agreements of each of the Pledged Companies that is a partnership.

          (oo) “Proceeds” has the meaning specified therefor in Section 2 hereof.

          (pp) “Real Property” means any estates or interests in real property now owned or
hereafter acquired by any Grantor or any Subsidiary of any Grantor and the improvements thereto.

          (qq) “Records” means information that is inscribed on a tangible medium or which is
stored in an electronic or other medium and is retrievable in perceivable form.

          (rr) “Related Parties” means, with respect to any Indemnified Party, such Indemnified
Party and each of its officers, directors and employees.

          (ss) “Secured Obligations” has the meaning specified in the recitals to this
Agreement.

          (tt) “Secured Party” has the meaning specified in the preamble to this Agreement.

          (uu) “Securities Account” means a securities account (as that term is defined in the
Code).

          (vv) “Security Interest” has the meaning specified therefor in Section 2
hereof.

          (ww) “Subordination Agreement” has the meaning set forth in the Subordinated Note.

          (xx) “Supporting Obligations” means supporting obligations (as such term is defined in
the Code) and includes letters of credit and guaranties issued in support of Accounts, Chattel
Paper, documents, General Intangibles, instruments, or Investment Related Property.

          (yy) “Trademarks” means any and all trademarks, trade names, registered trademarks,
trademark applications, service marks, registered service marks and service mark applications,
including, (i) the trade names, registered trademarks, trademark applications, registered service
marks and service mark applications listed on Schedule 5 attached hereto and made a part
hereof, (ii) all renewals thereof,

5

 

(iii) all income, royalties, damages and payments now and hereafter due or payable under and
with respect thereto, including, payments under all licenses entered into in connection therewith
and damages and payments for past or future infringements or dilutions thereof, (iv) the right to
sue for past, present and future infringements and dilutions thereof, (v) the goodwill of each
Grantor’s business symbolized by the foregoing or connected therewith, and (vi) all of each
Grantor’s rights corresponding thereto throughout the world.

          (zz) “Trademark Security Agreement” means each Trademark Security Agreement among
Grantors, or any of them, and Secured Party, in substantially the form of Exhibit D
attached hereto, pursuant to which Grantors have granted to Secured Party, a security interest in
all their respective Trademarks.

          (aaa) “URL” means “uniform resource locator,” an internet web address.

     2. Grant of Security. (a) Each Grantor hereby unconditionally grants, assigns and
pledges to Secured Party a continuing security interest hereinafter referred to as the
“Security Interest” in all personal property of such Grantor whether now owned or hereafter
acquired or arising and wherever located, including such Grantor’s right, title, and interest in
and to the following, whether now owned or hereafter acquired or arising and wherever located (the
“Collateral”):

               (i) all of such Grantor’s Accounts;

               (ii) all of such Grantor’s Books;

               (iii) all of such Grantor’s Chattel Paper;

               (iv) all of such Grantor’s interest with respect to any Deposit Account;

               (v) all of such Grantor’s Equipment and fixtures;

               (vi) all of such Grantor’s General Intangibles;

               (vii) all of such Grantor’s Inventory;

               (viii) all of such Grantor’s Investment Related Property;

               (ix) all of such Grantor’s Negotiable Collateral;

               (x) all of such Grantor’s rights in respect of Supporting Obligations;

               (xi) all of such Grantor’s interest with respect to any Commercial Tort Claims;

               (xii) all of such Grantor’s money, Cash and Cash Equivalents, or other assets of each such
Grantor that now or hereafter come into the possession, custody, or control of Secured Party; and

               (xiii) all of the proceeds and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance or Commercial Tort Claims covering or relating to any or
all of the foregoing, and any and all Accounts, Books, Cash and Cash Equivalents, Chattel Paper,
Deposit Accounts, Equipment, General Intangibles, Inventory, Investment Related Property,
Negotiable Collateral, Supporting Obligations, Commercial Tort Claims, money, or other tangible or
intangible property resulting from the sale, lease, license, exchange, collection, or other
disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any
of the property of Grantors, any rebates or refunds, whether for taxes or otherwise, and all
proceeds of any such proceeds, or any portion thereof or interest therein, and the proceeds

6

 

thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether
insured or not insured, and, to the extent not otherwise included, any indemnity, warranty, or
guaranty payable by reason of loss or damage to, or otherwise with respect to any of the foregoing
Collateral (the “Proceeds”). Without limiting the generality of the foregoing, the term
“Proceeds” includes whatever is receivable or received when Investment Related Property or proceeds
are sold, exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes proceeds of any indemnity or guaranty payable to any Grantor or Secured
Party from time to time with respect to any of the Investment Related Property.

          Notwithstanding anything contained in this Agreement to the contrary, the term “Collateral”
shall not include (i) voting Capital Stock of any first-tier Subsidiary (as defined in the
Financing Agreement) of a Grantor if (A) such Subsidiary is a CFC, and (B) such Capital Stock
represent more than 65% of the outstanding voting Capital Stock of such Subsidiary, (ii) any rights
or interest in any contract, lease, permit, license, charter or license agreement covering real or
personal property of any Grantor or the property governed by any such contract if under the terms
of such contract, lease, permit, license, charter or license agreement, or applicable law with
respect thereto, the valid grant of a security interest or lien therein or on property governed
thereby is prohibited as a matter of law or under the terms of such contract, lease, permit,
license, charter or license agreement or would cause a forfeiture thereunder and such prohibition
has not been waived or the consent of the other party to such contract, lease, permit, license,
charter or license agreement has not been obtained; provided, that, the foregoing
exclusions shall in no way be construed (A) to apply if any described prohibition is unenforceable
under Section 9-406, 9-407, or 9-408 of the Code or other applicable law, or (B) to limit, impair,
or otherwise affect the Secured Party’s continuing security interests in and liens upon any rights
or interests of any Grantor in or to (x) monies due or to become due under any described contract,
lease, permit, license, charter or license agreement (including any Accounts), or (y) any proceeds
from the sale, license, lease, or other dispositions of any such contract, lease, permit, license,
charter, license agreement, or Capital Stock, or (iii) any “intent to use” trademark or service
mark application contained in General Intangibles if granting a security interest therein is deemed
to invalidate, void, cancel, or abandon such application; provided, that the foregoing
exclusion (A) shall not apply when the granting of a security interest in such application is no
longer deemed to invalidate, void, cancel, or abandon such application, and (B) shall not limit,
impair, or otherwise affect Secured Party’s continuing security interests in and Liens upon any
rights or interests of any Grantor in or to any proceeds from the sale, license, lease, or other
dispositions of any such application.

     3. Security for Obligations. The Security Interest created hereby secures the payment
and performance of all the Secured Obligations, whether now existing or arising hereafter. Without
limiting the generality of the foregoing, this Agreement secures the payment of all amounts which
constitute part of the Secured Obligations and would be owed by Grantors, or any of them, to
Secured Party, but for the fact that they are unenforceable or not allowable due to the existence
of an Insolvency Proceeding involving any Grantor.

     4. Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a) each
of the Grantors shall remain liable under the contracts and agreements included in the Collateral,
including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform all
of the duties and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of the rights hereunder shall not release any
Grantor from any of its duties or obligations under such contracts and agreements included in the
Collateral, and (c) none of the members of the Secured Party shall have any obligation or liability
under such contracts and agreements included in the Collateral by reason of this Agreement, nor
shall the Secured Party be obligated to perform any of the obligations or duties of any Grantors
thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.
Until an Event of Default shall occur and be continuing, except as otherwise provided in this
Agreement or the Subordinated Note, Grantors shall have the right to possession and enjoyment of
the Collateral for the purpose of conducting the ordinary course of their respective businesses,
subject to and upon the terms hereof and of the Subordinated Note. Without

7

 

limiting the generality of the foregoing, it is the intention of the parties hereto that
record and beneficial ownership of the Pledged Interests, including, all voting, consensual, and
dividend rights, shall remain in the applicable Grantor until the occurrence of an Event of
Default and until Secured Party shall notify the applicable Grantor of Secured Party’s exercise of
voting, consensual, or dividend rights with respect to the Pledged Interests pursuant to
Section 15 hereof.

     5. Representations and Warranties. Each Grantor hereby represents and warrants as
follows:

          (a) The exact legal name of each of the Grantors is set forth on the signature pages of this
Agreement.

          (b) Schedule 7 attached hereto sets forth all Real Property owned by Grantors as of
the date hereof.

          (c) Such Grantor is the sole legal and beneficial owner or licensee of all Intellectual
Property that is material to the conduct of its business as currently contemplated (other than
non-exclusive licenses of Intellectual Property in the ordinary course of business where such
Grantor is the licensor). As of the date hereof, no Grantor has any interest in, or title to, any
material Copyrights, material Intellectual Property Licenses, material Patents, material
Trademarks, or material Copyrights except as set forth on Schedules 1, 2, 3 and 5,
respectively, attached hereto. This Agreement is effective to create a valid and continuing Lien
on such Copyrights, Intellectual Property Licenses, Patents and registered Trademarks or Trademark
applications (except for Trademark applications filed on an intent-to-use basis) and, upon filing
of the Copyright Security Agreement with the United States Copyright Office and filing of the
Patent Security Agreement and the Trademark Security Agreement with the United States Patent and
Trademark Office, and the filing of appropriate financing statements in the jurisdictions listed on
Schedule 8 hereto, all action necessary to perfect the Security Interest in and to each
Grantor’s Patents, material Trademarks, or registered Copyrights has been taken and such perfected
Security Interests are enforceable to such extent as against any and all creditors of and
purchasers from any Grantor. No Grantor has any interest in any Copyright that is necessary in
connection with the operation of the Borrower’s business, except for those Copyrights, identified
on Schedule 1 attached hereto which have been registered with the United States Copyright
Office.

          (d) This Agreement creates a valid security interest in the Collateral of each of Grantors, to
the extent a security interest therein can be created under the Code, securing the payment of the
Secured Obligations. Except to the extent a security interest in the Collateral cannot be
perfected by the filing of a financing statement under the Code, all filings and other actions
necessary to perfect such security interest have been duly taken or will have been taken upon the
filing of financing statements listing each applicable Grantor, as a debtor, and Secured Party, as
secured party, in the jurisdictions listed next to such Grantor’s name on Schedule 8
attached hereto. Upon the making of such filings, Secured Party shall have a priority (which
security interest is junior only to the Liens of the First Lien Agent and the Permitted Liens
arising as a matter of law or granted in connection with a purchased money indebtedness or a
capitalized lease) perfected security interest in the Collateral of each Grantor to the extent such
security interest can be perfected by the filing of a financing statement. All action by any
Grantor necessary to perfect such security interest on each item of Collateral has been duly taken.

          (e) (i) Except for the Security Interest created hereby, each Grantor is and will at all times
be the sole holder of record and the legal and beneficial owner, free and clear of all Liens other
than Permitted Liens, of the Pledged Interests indicated on Schedule 4 as being owned by
such Grantor and, when acquired by such Grantor, any Pledged Interests acquired after the date
hereof; (ii) all of the Pledged Interests (other than Pledged Interests received from insolvent or
troubled entities as a result of

8

 

delinquent accounts) are duly authorized, validly issued, fully paid and nonassessable and the
Pledged Interests constitute or will constitute the percentage of the issued and outstanding
Capital Stock of the Pledged Companies of such Grantor identified on Schedule 4 hereto as
supplemented or modified by any Pledged Interests Addendum or any Supplement to this Agreement;
(iii) such Grantor has the right and requisite authority to pledge, the Investment Related Property
(other than Investment Related Property received from insolvent or troubled entities as a result of
delinquent accounts) pledged by such Grantor to Secured Party as provided herein; (iv) all actions
necessary to perfect, establish the first priority (except for Permitted Liens) of, or otherwise
protect, Secured Party’s Liens in the Investment Related Collateral, and the proceeds thereof, will
have been duly taken, (A) upon the execution and delivery of this Agreement; (B) upon the taking of
possession by Secured Party of any certificates constituting the Pledged Interests, to the extent
such Pledged Interests are represented by certificates, together with undated powers endorsed in
blank by the applicable Grantor; (C) upon the filing of financing statements in the applicable
jurisdiction set forth on Schedule 8 attached hereto for such Grantor with respect to the
Pledged Interests of such Grantor that are not represented by certificates, and (D) with respect to
any Securities Accounts, upon the execution and delivery of Control Agreements with respect
thereto; and (v) each Grantor will deliver to the Secured Party (or, with respect to any Pledged
Interests created or obtained after the date hereof, will deliver in accordance with Sections
6(a) and 8 hereof) all certificates representing the Pledged Interests owned by such
Grantor to the extent such Pledged Interests are represented by certificates, and undated powers
endorsed in blank with respect to such certificates. None of the Pledged Interests owned or held
by such Grantor has been issued or transferred in violation of any securities registration,
securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be
subject.

          (f) No consent, approval, authorization, or other order or other action by, and no notice to
or filing with, any Governmental Authority or any other Person is required (i) for the grant of a
Security Interest by such Grantor in and to the Collateral pursuant to this Agreement or for the
execution, delivery, or performance of this Agreement by such Grantor, or (ii) for the exercise by
Secured Party of the voting or other rights provided for in this Agreement with respect to the
Investment Related Property (other than Investment Related Property received from insolvent or
troubled entities as a result of delinquent accounts) or the remedies in respect of the Collateral
pursuant to this Agreement, except as may be required in connection with such disposition of
Investment Related Property by laws affecting the offering and sale of securities generally. No
Intellectual Property License to which such Grantor is a party requires any consent for such
Grantor to grant the security interest granted hereunder in such Grantor’s right, title or interest
in or to any Copyrights, Patents, Trademarks or material Intellectual Property Licenses.

          (g) Schedule 9 attached hereto sets forth all motor vehicles owned by Grantors as of
the date hereof, by model, model year and vehicle identification number (“VIN”).

          (h) Schedule 10 attached hereto sets forth all Pledged Notes. Unless otherwise
permitted by the Subordinated Note, the proceeds of the loans evidenced by each Pledged Note have
been fully disbursed, and no Grantor has any obligation to make any future advances or other
disbursements under or in respect of any of the Pledged Notes.

     6. Covenants. Each Grantor, jointly and severally, covenants and agrees with the
Secured Party that from and after the date of this Agreement and until the date of termination of
this Agreement in accordance with Section 22 hereof:

          (a) Possession of Collateral. In the event that any Collateral, including proceeds,
is evidenced by or consists of Negotiable Collateral, Investment Related Property, or Chattel
Paper, and if and to the extent that perfection or priority of Secured Party’s Security Interest is
dependent on or

9

 

enhanced by possession, from and after the payment in full of the Senior Obligations (as such
term is defined in the Subordination Agreement) and the termination of the commitments under the
Senior Loan Documents (as such term is defined in the Subordination Agreement) the applicable
Grantor, as promptly as practicable upon the request of the Secured Party, and in accordance with
Section 8 hereof, shall execute such other documents and instruments as shall be reasonably
requested by Secured Party or, if applicable, endorse and deliver physical possession of such
Negotiable Collateral (other than items deposited or to be deposited for collection), Investment
Related Property, or Chattel Paper to Secured Party, together with such undated powers endorsed in
blank as shall be requested by Secured Party;

          (b) Chattel Paper.

               (i) From and after the payment in full of the Senior Obligations (as such term is defined in
the Subordination Agreement) and the termination of commitments under the Senior Loan Documents (as
such term is defined in the Subordination Agreement), upon the request of the Secured Party, each
Grantor shall as promptly as practicable take all steps reasonably necessary to grant Secured Party
control of all electronic Chattel Paper in accordance with the Code and all “transferable records”
as that term is defined in Section 16 of the Uniform Electronic Transaction Act and Section 201 of
the federal Electronic Signatures in Global and National Commerce Act as in effect in any relevant
jurisdiction;

               (ii) If any Grantor retains possession of any Chattel Paper or instruments (which retention of
possession shall be subject to the extent permitted hereby and by the Financing Agreement),
promptly upon the request of Secured Party, such Chattel Paper and instruments shall be marked with
the following legend: “This writing and the obligations evidenced or secured hereby are subject to
the Security Interest of Sun Mackie LLC”;

          (c) Control Agreements.

               (i) To the extent required by the Subordinated Note, each Grantor shall obtain an
authenticated Control Agreement, from each bank holding a Deposit Account for such Grantor;

               (ii) To the extent required by the Subordinated Note, each Grantor shall obtain authenticated
Control Agreements, from each issuer of uncertificated securities, securities intermediary, or
commodities intermediary issuing or holding any financial assets or commodities to or for any
Grantor;

          (d) Letter-of-Credit Rights. From and after the payment in full of the Senior Loan
Obligations (as such term is defined in the Subordination Agreement) and the termination of the
commitments under the Senior Loan Documents (as such term is defined in the Subordination
Agreement), each Grantor that is or becomes the beneficiary of a letter of credit shall promptly
(and in any event within 5 Business Days after becoming a beneficiary), notify Secured Party
thereof and, upon the request by Secured Party, enter into a tri-party agreement with Secured Party
and the issuer or confirming bank with respect to letter-of-credit rights (as that term is defined
in the Code) assigning such letter-of-credit rights to Secured Party and directing all payments
thereunder to Secured Party’s Account, all in form and substance satisfactory to Secured Party;

          (e) Commercial Tort Claims. Each Grantor shall promptly (and in any event within 5
Business Days of receipt thereof), notify Secured Party in writing upon incurring or otherwise
obtaining a Commercial Tort Claim involving a claim in excess of $150,000 against any third party
and, upon request of Secured Party, promptly amend Schedule 6 to this Agreement to describe
such after-acquired Commercial Tort Claim in a manner that reasonably identifies such Commercial
Tort Claim, and hereby authorizes the

10

 

filing of additional financing statements or amendments to existing financing statements and
do such other acts or things deemed necessary or desirable by Secured Party to give Secured Party a
priority (subject to Permitted Liens and Liens of the First Lien Agent), perfected security
interest in any such Commercial Tort Claim;

          (f) Government Contracts. If any Account or Chattel Paper arises out of a contract or
contracts with the United States of America or any department, agency, or instrumentality thereof,
Grantors shall promptly (and in any event within 5 Business Days of the creation thereof) notify
Secured Party thereof in writing and execute any instruments or take any steps reasonably required
by Secured Party in order that all moneys due or to become due under such contract or contracts
shall be assigned to Secured Party, and notice thereof given under the Assignment of Claims Act or
other applicable law;

          (g) Intellectual Property.

               (i) Upon request of Secured Party, in order to facilitate filings with the United States
Patent and Trademark Office and the United States Copyright Office, each Grantor shall execute and
deliver to Secured Party one or more Copyright Security Agreements, Trademark Security Agreements,
or Patent Security Agreements to further evidence Secured Party’s Lien on such Grantor’s Patents,
Trademarks, or Copyrights, and the General Intangibles of such Grantor relating thereto or
represented thereby;

               (ii) Each Grantor shall have the duty, to the extent necessary or economically desirable in
the operation of such Grantor’s business, (A) to sue for infringement, misappropriation, or
dilution and to recover any and all damages for such infringement, misappropriation, or dilution,
(B) to prosecute diligently any trademark application or service mark application that is part of
the Trademarks pending as of the date hereof or hereafter until the termination of this Agreement,
(C) to prosecute diligently any patent application that is part of the Patents pending as of the
date hereof or hereafter until the termination of this Agreement, and (D) to take all necessary
action to preserve and maintain all of such Grantor’s Patents, Trademarks, Copyrights, Intellectual
Property Licenses, and its rights therein, including the filing of applications for renewal,
affidavits of use, affidavits of noncontestability and opposition and interference and cancellation
proceedings. Each Grantor shall promptly file an application with the United States Copyright
Office for any Copyright that has not been registered with the United States Copyright Office if
such Copyright is necessary in connection with the operation of such Grantor’s business. Any
expenses incurred in connection with the foregoing shall be borne by the appropriate Grantor. Each
Grantor further agrees not to abandon any material Patent, Trademark, Copyright, or Intellectual
Property License that is necessary or economically desirable in the operation of such Grantor’s
business without the prior written consent of Secured Party;

               (iii) Grantors acknowledge and agree that the Secured Party shall have no duties with respect
to the Trademarks, Patents, Copyrights, or Intellectual Property Licenses. Without limiting the
generality of this Section 6(g), Grantors acknowledge and agree that Secured Party shall
not be under any obligation to take any steps necessary to preserve rights in the Trademarks,
Patents, Copyrights, or Intellectual Property Licenses against any other Person, but a Secured
Party may do so at its option from and after the occurrence and during the continuance of an Event
of Default, and all expenses incurred in connection therewith (including, reasonable fees and
expenses of attorneys and other professionals) shall be for the sole account of Borrower and shall
be chargeable to the Loan Account;

               (iv) In no event shall any Grantor, either itself or through any agent, employee, licensee, or
designee, file an application for the registration of any Copyright with the United States
Copyright Office without giving Secured Party prior written notice thereof or any Patent or

11

 

Trademark with the United States Patent and Trademark Office without giving Secured Party
written notice thereof promptly thereafter. Promptly upon any such filing, each Grantor shall
comply with Section 6(g)(i) hereof;

          (h) Investment Related Property.

               (i) If any Grantor shall receive or become entitled to receive any Pledged Interests (other
than Pledged Interests of little or no value that are received from insolvent or troubled entities
as a result of delinquent accounts) after the date hereof, it shall promptly (and in any event
within 5 Business Days of receipt thereof) deliver to Secured Party a duly executed Pledged
Interests Addendum identifying such Pledged Interests;

               (ii) Upon the occurrence and during the continuance of an Event of Default, all sums of money
and property paid or distributed in respect of the Investment Related Property which are received
by any Grantor shall be held by the Grantors in trust for the benefit of Secured Party segregated
from such Grantor’s other property, and such Grantor shall deliver such property forthwith to
Secured Party in the exact form received;

               (iii) [intentionally omitted];

               (iv) No Grantor shall make or consent to any amendment or other modification or waiver with
respect to any Pledged Interests, Pledged Operating Agreement, or Pledged Partnership Agreement, or
enter into any agreement or permit to exist any restriction with respect to any Pledged Interests,
in each case, that would materially adversely affect the rights of Secured Party or the value of
the applicable Collateral other than pursuant to the Loan Documents;

               (v) Each Grantor agrees that it will cooperate with Secured Party in obtaining all necessary
approvals and making all necessary filings under federal, state, local, or foreign law in
connection with the Security Interest on the Investment Related Property or any sale or transfer
thereof;

               (vi) As to all limited liability company or partnership interests, issued under any Pledged
Operating Agreement or Pledged Partnership Agreement, all limited liability company or partnership
interests, issued each Grantor hereby represents, warrants and covenants that the Pledged Interests
issued pursuant to such agreement (A) are not and shall not be dealt in or traded on securities
exchanges or in securities markets, (B) do not and will not constitute investment company
securities, and (C) are not and will not be held by such Pledgor in a securities account. In
addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements, or any
other agreements governing any of the Pledged Interests issued under any Pledged Operating
Agreement or Pledged Partnership Agreement, provide or shall provide that such Pledged Interests
are securities governed by Article 8 of the Uniform Commercial Code as in effect in any relevant
jurisdiction;

          (i) Real Property; Fixtures. Each Grantor covenants and agrees that upon the
acquisition of any fee interest in Real Property it will promptly (and in any event within 5
Business Days of acquisition) notify Secured Party of the acquisition of such Real Property and
will grant to Secured Party, a priority mortgage (subject to Permitted Liens and Liens of the First
Lien Agent) on each fee interest in Real Property now or hereafter owned by such Grantor and shall
deliver such other documentation and opinions, in form and substance satisfactory to Secured Party,
in connection with the grant of such mortgage as Secured Party shall request in its reasonable
discretion, including title insurance policies, financing statements, fixture filings and
environmental audits and such Grantor shall pay all recording costs, intangible taxes and other
fees and costs (including reasonable attorneys fees and

12

 

expenses) incurred in connection therewith. Each Grantor acknowledges and agrees that, to the
extent permitted by applicable law, all of the Collateral shall remain personal property regardless
of the manner of its attachment or affixation to real property.

          (j) Transfers and Other Liens. Grantors shall not (i) sell, assign (by operation of
law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the
Collateral, except as expressly permitted by the Financing Agreement, or (ii) create or permit to
exist any Lien upon or with respect to any of the Collateral of any of Grantors, except for
Permitted Liens and Liens of the First Lien Agent. The inclusion of Proceeds in the Collateral
shall not be deemed to constitute Secured Party’s consent to any sale or other disposition of any
of the Collateral except as expressly permitted in the Financing Agreement, Subordinated Note or
this Agreement;

          (k) Other Actions as to Any and All Collateral. Each Grantor shall promptly (and in
any event within 5 Business Days of acquiring or obtaining such Collateral) notify Secured Party in
writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of
(i) Trademarks, Patents, Copyrights, Intellectual Property Licenses, Investment Related Property,
Chattel Paper (electronic, tangible or otherwise) (provided that such Grantor shall have no
obligation to comply with this Section 6(k) with respect to Chattel Paper until the
aggregate value of such Chattel Paper in which Grantors have an interest exceeds $100,000),
documents (as defined in Article 9 of the Code) (provided that such Grantor shall have no
obligation to comply with this Section 6(k) with respect to documents until the aggregate
value of such documents in which Grantors have an interest exceeds $100,000), promissory notes (as
defined in the Code) (provided that such Grantor shall have no obligation to comply with this
Section 6(k) with respect to promissory notes until the aggregate value of such promissory
notes in which Grantors have an interest exceeds $100,000), or instruments (as defined in the Code)
(other than items deposited or to be deposited for collection) or (ii) any amount payable under or
in connection with any of the Collateral being or becoming evidenced after the date hereof by any
Chattel Paper, documents, promissory notes, or instruments (other than items deposited or to be
deposited for collection) and, in each such case upon the request of Secured Party and in
accordance with Section 8 hereof, promptly execute such other documents, or if applicable,
deliver such Chattel Paper, other documents or certificates evidencing any Investment Related
Property in accordance with Section 6 hereof and do such other acts or things deemed
reasonably necessary by Secured Party to protect Secured Party’s Security Interest therein; and

          (l) Motor Vehicles. Upon request of Secured Party, with respect to all motor vehicles
constituting Collateral and owned by any Grantor, Grantor shall deliver to Secured Party, a
certificate of title for all such motor vehicles which fair market value individually or in
aggregate exceeds $100,000 and shall cause those title certificates to be filed (with Secured
Party’s lien noted thereon) in the appropriate state motor vehicle filing office.

          (m) Pledged Notes. Without Secured Party’s prior written consent, no Grantor shall
(i) waive, release, or forgive all or any portion of any obligation to pay principal or interest in
respect of any of the Pledged Notes, (ii) agree to, assign or surrender its rights or interests
under any of the Pledged Notes, (iii) terminate or cancel any of the Pledged Notes, or (iv)
materially modify, change, supplement, or amend any of the Pledged Notes in a manner that would
materially and adversely affect the value of the Pledged Notes.

     7. Relation to Other Security Documents. The provisions of this Agreement shall be
read and construed with the other agreements referred to below in the manner so indicated.

          (a) Patent, Trademark, Copyright Security Agreements. The provisions of the Copyright
Security Agreements, Trademark Security Agreements, and Patent Security Agreements are supplemental
to the provisions of this Agreement, and nothing contained in the Copyright Security

13

 

Agreements, Trademark Security Agreements, or the Patent Security Agreements shall limit any
of the rights or remedies of Secured Party hereunder.

          (b) Subordination Agreement. Anything herein to the contrary notwithstanding, the
liens and security interests securing the obligations evidenced by this Agreement, the exercise of
any right or remedy with respect thereto, the performance of the covenants hereunder, and certain
of the rights of the holder hereof are subject to the provisions of the Intercreditor Agreement
dated as of the date hereof, by and between Ableco Finance LLC, as First Lien Agent, and Secured
Party, as Junior Lender and the priority of the liens of the First Lien Agent. In the event of any
conflict between the terms of the Subordination Agreement and this Agreement, the terms of the
Subordination Agreement shall govern and control.

     8. Further Assurances.

          (a) Each Grantor agrees that from time to time, at its own expense, such Grantor will promptly
execute and deliver all further instruments and documents, and take all further action, that may be
necessary or that Secured Party may reasonably request, in order to perfect and protect any
Security Interest granted or purported to be granted hereby or to enable Secured Party to exercise
and enforce its rights and remedies hereunder with respect to any of the Collateral.

          (b) Each Grantor authorizes the filing by Secured Party of financing or continuation
statements, or amendments thereto, and such Grantor will execute and deliver to Secured Party such
other instruments or notices, as may be necessary or as Secured Party may reasonably request, in
order to perfect and preserve the Security Interest granted or purported to be granted hereby.

          (c) Each Grantor authorizes Secured Party at any time and from time to time to file, transmit,
or communicate, as applicable, financing statements and amendments (i) describing the Collateral as
“all personal property of debtor” or “all assets of debtor” or words of similar effect, (ii)
describing the Collateral as being of equal or lesser scope or with greater detail, and (iii) that
contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing
office acceptance. Each Grantor also hereby ratifies any and all financing statements or
amendments previously filed by Secured Party in any jurisdiction.

          (d) Each Grantor acknowledges that it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement filed in connection with
this Agreement without the prior written consent of Secured Party, subject to such Grantor’s rights
under Section 9-509(d)(2) of the Code.

     9. Secured Party’s Right to Perform Contracts. Upon the occurrence and during the
continuance of an Event of Default, Secured Party (or its designee) may proceed to perform any and
all of the obligations of any Grantor contained in any contract, lease, or other agreement and
exercise any and all rights of any Grantor therein contained as fully as such Grantor itself could.

     10. Secured Party Appointed Attorney-in-Fact. Each Grantor hereby irrevocably
appoints Secured Party its attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor or otherwise, at such time as an Event of Default has
occurred and is continuing, to take any action and to execute any instrument which Secured Party
may reasonably deem necessary or advisable to accomplish the purposes of this Agreement, including:

14

 

          (a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and
receipts for moneys due and to become due under or in connection with the Accounts or any other
Collateral of such Grantor;

          (b) to receive and open all mail addressed to such Grantor and to notify postal authorities to
change the address for the delivery of mail to such Grantor to that of Secured Party;

          (c) to receive, indorse, and collect any drafts or other instruments, documents, Negotiable
Collateral or Chattel Paper;

          (d) to file any claims or take any action or institute any proceedings which Secured Party may
deem necessary or desirable for the collection of any of the Collateral of such Grantor or
otherwise to enforce the rights of Secured Party with respect to any of the Collateral;

          (e) to repair, alter, or supply goods, if any, necessary to fulfill in whole or in part the
purchase order of any Person obligated to such Grantor in respect of any Account of such Grantor;

          (f) to use any labels, Patents, Trademarks, trade names, URLs, domain names, industrial
designs, Copyrights, advertising matter or other industrial or intellectual property rights, in
advertising for sale and selling Inventory and other Collateral and to collect any amounts due
under Accounts, contracts or Negotiable Collateral of such Grantor; and

          (g) Secured Party shall have the right, but shall not be obligated, to bring suit in its own
name to enforce the Trademarks, Patents, Copyrights and Intellectual Property Licenses and, if
Secured Party shall commence any such suit, the appropriate Grantor shall, at the request of
Secured Party, do any and all lawful acts and execute any and all proper documents reasonably
required by Secured Party in aid of such enforcement.

     To the extent permitted by law, each Grantor hereby ratifies all that such attorney-in-fact
shall lawfully do or cause to be done by virtue of this Section 10. This power of attorney
is coupled with an interest and shall be irrevocable until this Agreement is terminated.

     11. Secured Party May Perform. If any Grantor fails to perform any agreement
contained herein, Secured Party may itself perform, or cause performance of, such agreement, and
the reasonable expenses of Secured Party incurred in connection therewith shall be payable, jointly
and severally, by Grantors.

     12. Secured Party’s Duties. The powers conferred on Secured Party hereunder are
solely to protect Secured Party’s interest in the Collateral, and shall not impose any duty upon
Secured Party to exercise any such powers. Except for the safe custody of any Collateral in its
actual possession and the accounting for moneys actually received by it hereunder, Secured Party
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. Secured Party shall
be deemed to have exercised reasonable care in the custody and preservation of any Collateral in
its actual possession if such Collateral is accorded treatment substantially equal to that which
Secured Party accords its own property.

     13. Collection of Accounts, General Intangibles and Negotiable Collateral. At any
time upon the occurrence and during the continuation of an Event of Default, Secured Party or
Secured Party’s designee may (a) notify Account Debtors of any Grantor that the Accounts, General
Intangibles, Chattel Paper or Negotiable Collateral have been assigned to Secured Party, or that
Secured Party has a security interest therein, and (b) collect the Accounts, General Intangibles
and Negotiable Collateral directly, and

15

 

any collection costs and expenses shall constitute part of such Grantor’s Secured Obligations
under the Subordinated Note.

     14. Disposition of Pledged Interests by Secured Party. None of the Pledged Interests
existing as of the date of this Agreement are, and none of the Pledged Interests hereafter acquired
on the date of acquisition thereof will be, registered or qualified under the various federal or
state securities laws of the United States and disposition thereof after an Event of Default may be
restricted to one or more private (instead of public) sales in view of the lack of such
registration. Each Grantor understands that in connection with such disposition, Secured Party may
approach only a restricted number of potential purchasers and further understands that a sale under
such circumstances may yield a lower price for the Pledged Interests than if the Pledged Interests
were registered and qualified pursuant to federal and state securities laws and sold on the open
market. Each Grantor, therefore, agrees that: (a) if Secured Party shall, pursuant to the terms
of this Agreement, sell or cause the Pledged Interests or any portion thereof to be sold at a
private sale, Secured Party shall have the right to rely upon the advice and opinion of any
nationally recognized brokerage or investment firm (but shall not be obligated to seek such advice
and the failure to do so shall not be considered in determining the commercial reasonableness of
such action) as to the best manner in which to offer the Pledged Interest or any portion thereof
for sale and as to the best price reasonably obtainable at the private sale thereof; and (b) such
reliance shall be conclusive evidence that Secured Party has handled the disposition in a
commercially reasonable manner.

     15. Voting Rights.

          (a) Upon the occurrence and during the continuation of an Event of Default, (i) Secured Party
may, at its option, and with 2 Business Days prior notice to any Grantor, and in addition to all
rights and remedies available to Secured Party under any other agreement, at law, in equity, or
otherwise, exercise all voting rights, and all other ownership or consensual rights in respect of
the Pledged Interests owned by such Grantor, but under no circumstances is Secured Party obligated
by the terms of this Agreement to exercise such rights, and (ii) if Secured Party duly exercises
its right to vote any of such Pledged Interests, each Grantor hereby appoints Secured Party, such
Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in
any manner Secured Party deems advisable for or against all matters submitted or which may be
submitted to a vote of shareholders, partners or members, as the case may be. The
power-of-attorney granted hereby is coupled with an interest and shall be irrevocable.

          (b) For so long as any Grantor shall have the right to vote the Pledged Interests owned by it,
such Grantor covenants and agrees that it will not, without the prior written consent of Secured
Party, vote or take any consensual action with respect to such Pledged Interests which would
materially adversely affect the rights of Secured Party or the value of the Pledged Interests or
that would be inconsistent with or result in any violation of any provision of the Subordinated
Note.

     16. Remedies. Upon the occurrence and during the continuance of an Event of Default:

          (a) Secured Party may exercise in respect of the Collateral, in addition to other rights and
remedies provided for herein, in the Subordinated Note, or otherwise available to it, all the
rights and remedies of a secured party on default under the Code or any other applicable law.
Without limiting the generality of the foregoing, each Grantor expressly agrees that, in any such
event, Secured Party without demand of performance or other demand, advertisement or notice of any
kind (except a notice specified below of time and place of public or private sale) to or upon any
of Grantors or any other Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the Code or any other applicable law),
may take immediate possession of all or any portion of the Collateral and (i) require Grantors to,
and each Grantor hereby agrees that it will at its own expense

16

 

and upon request of Secured Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured Party at one or more locations where
such Grantor regularly maintains Inventory, and (ii) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or private sale, at any of
Secured Party’s offices or elsewhere, for cash, on credit, and upon such other terms as Secured
Party may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale
shall be required by law, at least 10 days notice to any of Grantors 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 and specifically such notice shall constitute a reasonable “authenticated notification
of disposition” within the meaning of Section 9-611 of the Code. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the time and place to
which it was so adjourned.

          (b) Upon the occurrence and during the continuance of an Event of Default, Secured Party is
hereby granted a license or other right to use, without liability for royalties or any other
charge, each Grantor’s labels, Patents, Copyrights, rights of use of any name, trade secrets, trade
names, Trademarks, service marks and advertising matter, URLs, domain names, industrial designs,
other industrial or intellectual property or any property of a similar nature, whether owned by any
of Grantors or with respect to which any of Grantors have rights under license, sublicense, or
other agreements, as it pertains to the Collateral, in preparing for sale, advertising for sale and
selling any Collateral, and each Grantor’s rights under all licenses and all franchise agreements
shall inure to the benefit of Secured Party.

          (c) Any cash held by Secured Party as Collateral and all cash proceeds received by Secured
Party in respect of any sale of, collection from, or other realization upon all or any part of the
Collateral shall be applied against the Secured Obligations. In the event the proceeds of
Collateral are insufficient to satisfy all of the Secured Obligations in full, each Grantor shall
remain jointly and severally liable for any such deficiency.

          (d) Each Grantor hereby acknowledges that the Secured Obligations arose out of a commercial
transaction, and agrees that if an Event of Default shall occur and be continuing Secured Party
shall have the right to an immediate writ of possession without notice of a hearing. Secured Party
shall have the right to the appointment of a receiver for the properties and assets of each of
Grantors, and each Grantor hereby consents to such rights and such appointment and hereby waives
any objection such Grantors may have thereto or the right to have a bond or other security posted
by Secured Party.

     17. Remedies Cumulative. Each right, power, and remedy of Secured Party as provided
for in this Agreement or the Subordinated Note or now or hereafter existing at law or in equity or
by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other
right, power, or remedy provided for in this Agreement or the Subordinated Note or now or hereafter
existing at law or in equity or by statute or otherwise, and the exercise or beginning of the
exercise by Secured Party, of any one or more of such rights, powers, or remedies shall not
preclude the simultaneous or later exercise by Secured Party of any or all such other rights,
powers, or remedies.

     18. Marshaling. Secured Party shall not be required to marshal any present or future
collateral security (including but not limited to the Collateral) for, or other assurances of
payment of, the Secured Obligations or any of them or to resort to such collateral security or
other assurances of payment in any particular order, and all of its rights and remedies hereunder
and in respect of such collateral security and other assurances of payment shall be cumulative and
in addition to all other rights and remedies, however existing or arising. To the extent that it
lawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshaling
of collateral which might cause delay in or impede

17

 

the enforcement of Secured Party’s rights and remedies under this Agreement or under any other
instrument creating or evidencing any of the Secured Obligations or under which any of the Secured
Obligations is outstanding or by which any of the Secured Obligations is secured or payment thereof
is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably
waives the benefits of all such laws.

     19. Indemnity and Expenses.

          (a) Each Grantor agrees to indemnify Secured Party from and against all claims, lawsuits and
liabilities (including reasonable out-of-pocket attorneys fees) growing out of or resulting from
this Agreement (including, enforcement of this Agreement) or the Subordinated Note, except claims,
losses or liabilities resulting from the gross negligence or willful misconduct of the Related
Party seeking indemnification as determined by a final non-appealable order of a court of competent
jurisdiction. This provision shall survive the termination of this Agreement and the Subordinated
Note and the repayment of the Secured Obligations.

          (b) Grantors, jointly and severally, shall, upon demand, pay to Secured Party all out of
pocket costs and expenses which Secured Party may incur in connection with (i) the administration
of this Agreement, (ii) the custody, preservation, use or operation of, or, upon an Event of
Default, the sale of, collection from, or other realization upon, any of the Collateral in
accordance with this Agreement and Subordinated Note, (iii) the exercise or enforcement of any of
the rights of Secured Party hereunder or (iv) the failure by any of Grantors to perform or observe
any of the provisions hereof.

     20. Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS,
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
AGREEMENTS BETWEEN THE PARTIES. No waiver of any provision of this Agreement, and no consent to
any departure by any of Grantors herefrom, shall in any event be effective unless the same shall be
in writing and signed by Secured Party, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No amendment of any provision
of this Agreement shall be effective unless the same shall be in writing and signed by Secured
Party and each of Grantors to which such amendment applies.

     21. Addresses for Notices. All notices and other communications provided for
hereunder shall be given in the form and manner and delivered to Secured Party at its address
specified in the Subordinated Note, and to any of the Grantors at their respective addresses
specified in the Subordinated Note, or, as to any party, at such other address as shall be
designated by such party in a written notice to the other party.

     22. Continuing Security Interest: Assignments under Subordinated Note. This Agreement
shall create a continuing security interest in the Collateral and shall (a) remain in full force
and effect until the Secured Obligations have been paid in full in cash and the Subordinated Note
terminated in accordance with Section 9 thereof, (b) be binding upon each of Grantors, and their
respective successors and assigns, and (c) inure to the benefit of, and be enforceable by, Secured
Party, and its successors, transferees and assigns. Upon payment in full in cash of the Secured
Obligations in accordance with the provisions of the Subordinated Note in accordance with Section 9
thereof, the Security Interest granted hereby shall terminate and this Agreement and all rights to
the Collateral shall revert to Grantors or any other Person entitled thereto. At such time,
Secured Party will authorize the filing of appropriate termination statements to terminate such
Security Interests. No transfer or renewal, extension, assignment, or termination of this
Agreement or the Subordinated Note, or any other instrument or

18

 

document executed and delivered by any Grantor to Secured Party nor any additional Loans made
by any Secured Party to Borrower, nor the taking of further security, nor the retaking or
re-delivery of the Collateral to Grantors, or any of them, by Secured Party, shall release any of
Grantors from any obligation, except a release or discharge executed in writing by Secured Party in
accordance with the provisions of the Subordinated Note. Secured Party shall not by any act,
delay, omission or otherwise, be deemed to have waived any of its rights or remedies hereunder,
unless such waiver is in writing and signed by Secured Party and then only to the extent therein
set forth. A waiver by Secured Party of any right or remedy on any occasion shall not be construed
as a bar to the exercise of any such right or remedy which Secured Party would otherwise have had
on any other occasion.

     23. GOVERNING LAW. THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN THE STATE OF NEW YORK.

     24. CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. EACH OF THE PARTIES HERETO
AGREE THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
GRANTOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS; EACH GRANTOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES, AND DOCUMENTS IN ANY SUIT, ACTION, OR PROCEEDING
BROUGHT IN THE UNITED STATES OF AMERICA ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BY THE
MAILING (BY REGISTERED MAIL OR CERTIFIED MAIL, POSTAGE PREPAID) OR DELIVERING OF A COPY OF SUCH
PROCESS TO SUCH GRANTOR, C/O BORROWER, AT THE BORROWER’S ADDRESS FOR NOTICES AS SET FORTH IN THE
SUBORDINATED NOTE. THE GRANTORS AGREE THAT A FINAL NONAPPEALABLE JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE SECURED PARTY
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY GRANTOR IN ANY OTHER JURISDICTION. EACH GRANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH
GRANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT.

     25. WAIVER OF JURY TRIAL, ETC. EACH GRANTOR AND SECURED PARTY HEREBY WAIVE ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR

19

 

COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER
ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE
FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH GRANTOR CERTIFIES THAT NO
OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF SECURED PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SECURED PARTY OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR
COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH GRANTOR HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR SECURED PARTY ENTERING INTO THIS AGREEMENT.

     26. New Subsidiaries. Each Grantor shall cause any new direct or indirect Subsidiary
(whether by acquisition or creation) of any Grantor that becomes a Person comprising Borrower under
the Subordinated Note shall execute and deliver in favor of Secured Party an instrument in the form
of Annex 1 attached hereto. Upon the execution and delivery of Annex 1 by such new
Subsidiary, such Subsidiary shall become a Grantor hereunder with the same force and effect as if
originally named as a Grantor herein. The execution and delivery of any instrument adding an
additional Grantor as a party to this Agreement shall not require the consent of any Grantor
hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Grantor hereunder.

     27. Intentionally Omitted.

     28. Miscellaneous.

          (a) This Agreement may be executed in any number of counterparts and by different parties on
separate counterparts, each of which, when executed and delivered, shall be deemed to be an
original, and all of which, when taken together, shall constitute but one and the same Agreement.
Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method
of transmission shall be equally as effective as delivery of an original executed counterpart of
this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement.

          (b) Any provision of this Agreement which is prohibited or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such provision in any
other jurisdiction.

          (c) Headings used in this Agreement are for convenience only and shall not be used in
connection with the interpretation of any provision hereof.

          (d) The pronouns used herein shall include, when appropriate, either gender and both singular
and plural, and the grammatical construction of sentences shall conform thereto.

          (e) Unless the context of this Agreement clearly requires otherwise, the definitions of terms
herein shall apply equally to the singular and plural forms of the terms defined. Whenever the

20

 

context may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by
the phrase “without limitation,” whether or not so expressly stated in each such instance and the
term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase
“and/or.” The word “will” shall be construed to have the same meaning and effect as the word
“shall.” Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights. References in this Agreement to “determination” by any Secured Party include
estimates honestly made by such Secured Party (in the case of quantitative determinations) and
beliefs honestly held by such Secured Party (in the case of qualitative determinations).

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

21

 

          IN WITNESS WHEREOF, the undersigned parties hereto have executed this Agreement by and through
their duly authorized officers, as of the day and year first above written.

	 	 	 	 	 	 	 
	          GRANTORS:	 	LOUD TECHNOLOGIES INC.,
	 

	 	a Washington corporation
	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MACKIE DESIGN INC.,

a Washington corporation
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SIA SOFTWARE COMPANY, INC.,

a New York corporation
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ST. LOUIS MUSIC, INC.,

a Missouri corporation
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

[SIGNATURE PAGE TO SUBORDINATED SECURITY AGREEMENT]

 

 

	 	 	 	 	 	 	 
	SECURED PARTY:	 	[SUN MACKIE LLC],

a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

[SIGNATURE PAGE TO SUBORDINATED SECURITY AGREEMENT]

 

 

SCHEDULE 1

COPYRIGHTS

1

 

SCHEDULE 2

INTELLECTUAL PROPERTY LICENSES

2

 

SCHEDULE 3

PATENTS

1

 

SCHEDULE 4

PLEDGED COMPANIES

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Percentage	 	 
	 	 	Name of Pledged	 	Number of	 	Class of	 	of Class	 	Certificate
	Name of Pledgor	 	Company	 	Shares/Units	 	Interests	 	Owned	 	Nos.
	 

	 	 
	 	 
	 	 
	 	 
	 	 

1

 

SCHEDULE 5

TRADEMARKS

1

 

SCHEDULE 6

COMMERCIAL TORT CLAIMS

[include specific case caption or descriptions per Official Code Comment 5 to Section 9-108 of the

Code]

1

 

SCHEDULE 7

OWNED REAL PROPERTY

1

 

SCHEDULE 8

LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS

	 	 	 
	Grantor

	 	Jurisdictions

1

 

SCHEDULE 9

OWNED MOTOR VEHICLES

1

 

SCHEDULE 10

PLEDGED NOTES

1

 

ANNEX 1 TO SECURITY AGREEMENT

FORM OF SUPPLEMENT

     Supplement No.                      (this “Supplement”) dated as of                                   
      , 20                     , to the
Security Agreement dated as of March                     , 2008 (as amended, restated, supplemented or otherwise
modified from time to time, the “Security Agreement”), by each of the parties listed on the
signature pages thereto and those additional entities that thereafter become parties thereto
(collectively, jointly and severally, “Grantors” and each individually “Grantor”),
and EW GOLF HOLDING CORP., a Delaware corporation (together with its successors and assigns, if
any, in such capacity “Secured Party”).

WITNESSETH:

     WHEREAS, that certain Senior Subordinated Promissory Note dated as of October 19, 2006 (as
amended, restated, supplemented or otherwise modified from time to time, including all exhibits and
schedules thereto, the “Subordinated Note”) executed by LOUD TECHNOLOGIES INC., a
Washington corporation (“Borrower”) is issued in favor of the Secured Party and pursuant to
the Subordinated Note, each of the Grantors listed on the signature pages thereto has guaranteed
the obligations of the Borrower in favor of the Secured Party, and

     WHEREAS, capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Subordinated Note; and

     WHEREAS, Grantors have entered into the Security Agreement in order to induce the Secured
Party to make certain financial accommodations to Borrower; and

     WHEREAS, pursuant to Section 26 of the Security Agreement, any new direct or indirect
Subsidiary (whether by acquisition or creation) of any Grantor that becomes a Person composing
Borrower under the Subordinated Note (each, a “New Grantor”) shall execute and deliver this
Supplement in favor of Secured Party.

     NOW, THEREFORE, for and in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each New Grantor
hereby agrees as follows:

     1. In accordance with Section 26 of the Security Agreement, each New Grantor, by its
signature below, becomes a “Grantor” under the Security Agreement with the same force and effect as
if originally named therein as a “Grantor” and each New Grantor hereby (a) agrees to all of the
terms and provisions of the Security Agreement applicable to it as a “Grantor” thereunder and (b)
represents and warrants that the representations and warranties made by it as a “Grantor”
thereunder are true and correct on and as of the date hereof. In furtherance of the foregoing,
each New Grantor, as security for the payment and performance in full of the Secured Obligations,
does hereby grant, assign, and pledge to Secured Party, a security interest in and security title
to all assets of such New Grantor including, all property of the type described in Section
2 of the Security Agreement to secure the full and prompt payment of the Secured Obligations,
including, any interest thereon, plus reasonable attorneys’ fees and expenses if the Secured
Obligations represented by the Security Agreement are collected by law, through an attorney-at-law,
or under advice therefrom. Schedule 1, “Copyrights”, Schedule 2, “Intellectual
Property Licenses”, Schedule 3, “Patents”, Schedule 4, “Pledged Companies”,
Schedule 5, “Trademarks”, Schedule 6, “Commercial Tort Claims”, Schedule 7,
“Owned Real Property,” Schedule 8, “List of Uniform Commercial Code Filing Jurisdictions,”
Schedule 9, “Owned Motor Vehicles” and Schedule 10, “Pledged Notes” attached hereto
supplement Schedule 1, Schedule 2, Schedule 3, Schedule 4,
Schedule 5, Schedule 6, Schedule 7, Schedule 8, Schedule 9,
and Schedule 10 respectively, to the Security Agreement

 

 

and shall be deemed a part thereof for all purposes of the Security Agreement. Each reference
to a “Grantor” in the Security Agreement shall be deemed to include each New Grantor. The Security
Agreement is incorporated herein by reference.

     2. Each New Grantor represents and warrants to Secured Party that this Supplement has been
duly executed and delivered by such New Grantor and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other
similar laws affecting creditors’ rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).

     3. This Supplement may be executed in multiple counterparts, each of which shall be deemed to
be an original, but all such separate counterparts shall together constitute but one and the same
instrument. Delivery of a counterpart hereof by facsimile transmission or by e-mail transmission
shall be as effective as delivery of a manually executed counterpart hereof.

     4. Except as expressly supplemented hereby, the Security Agreement shall remain in full force
and effect.

     5. This Supplement, the construction, interpretation, and enforcement hereof and thereof, and
the rights of the parties hereto and thereto with respect to all matters arising hereunder or
thereunder or related hereto or thereto shall be determined under, governed by, and construed in
accordance with the laws of the State of New York applicable to contracts made and to be performed
in the State of New York.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

2

 

          IN WITNESS WHEREOF, each New Grantor and Secured Party have duly executed this Supplement to
the Security Agreement as of the day and year first above written.

	 	 	 	 	 	 	 
	          NEW GRANTORS:	 	[Name of New Grantor]  
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[Name of New Grantor]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	          SECURED PARTY:	 	SUN, MACKIE LLC
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

SUPPLEMENT TO SECURITY AGREEMENT

3

 

EXHIBIT A

COPYRIGHT SECURITY AGREEMENT

     This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is made as of
this ___day of                     , 200___, among Grantors listed on the signature pages hereof
(collectively, jointly and severally, “Grantors” and each individually “Grantor”), and SUN
MACKIE LLC, a Delaware limited liability company, (together with its successors and assigns, if
any, in such capacity “Secured Party”).

W I T N E S S E T H:

     WHEREAS, that certain Senior Subordinated Promissory Note dated as of October 19, 2006 (as
amended, restated, supplemented or otherwise modified from time to time, including all exhibits and
schedules thereto, the “Subordinated Note”) executed by LOUD TECHNOLOGIES INC., a
Washington corporation (“Borrower”) is issued in favor of the Secured Party and pursuant to
the Subordinated Note, each of the Grantors listed on the signature pages thereto has guaranteed
the obligations of the Borrower in favor of the Secured Party, and

     WHEREAS, Secured Party is willing to issue the Subordinated Note, but only upon the condition,
among others, that Grantors shall have executed and delivered to Secured Party, that certain
Security Agreement of even date herewith (including all annexes, exhibits or schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and

     WHEREAS, pursuant to the Security Agreement, Grantors are required to execute and deliver to
Secured Party this Copyright Security Agreement;

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantors hereby agree as follows:

     6. DEFINED TERMS. All capitalized terms used but not otherwise defined herein have
the meanings given to them in the Security Agreement.

     7. GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL. Each Grantor hereby grants to
Secured Party, a continuing priority security interest in all of such Grantor’s right, title and
interest in, to and under the following, whether presently existing or hereafter created or
acquired (collectively, the “Copyright Collateral”):

          (a) all of such Grantor’s Copyrights and Copyright Intellectual Property Licenses to which it
is a party including those referred to on Schedule I hereto;

          (b) all goodwill, trade secrets, proprietary or confidential information, technical
information, procedures, formulae, quality control standards, designs, operating and training
manuals, customer lists, and other General Intangibles with respect to the foregoing;

          (c) all reissues, continuations or extensions of the foregoing; and

          (d) all products and proceeds of the foregoing, including, any claim by such Grantor against
third parties for past, present or future infringement of any Copyright or any Copyright licensed
under any Intellectual Property License.

 

 

     8. SECURITY FOR SECURED OBLIGATIONS. This Copyright Security Agreement and the
Security Interest created hereby secures the payment and performance of all the Secured
Obligations, whether now existing or arising hereafter. Without limiting the generality of the
foregoing, this Copyright Security Agreement secures the payment of all amounts which constitute
part of the Obligations and would be owed by Grantors, or any of them, to Secured Party, whether or
not they are unenforceable or not allowable due to the existence of an Insolvency Proceeding
involving any Grantor.

     9. SECURITY AGREEMENT. The Security Interests granted pursuant to this Copyright
Security Agreement are granted in conjunction with the Security Interests granted to Secured Party
pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights
and remedies of Secured Party with respect to the Security Interest in the Copyright Collateral
made and granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth herein.

     10. AUTHORIZATION TO SUPPLEMENT. Grantors shall give Secured Party prompt notice in
writing of any additional United States copyright registrations or applications therefor after the
date hereof. Grantors hereby authorize Secured Party unilaterally to modify this Agreement by
amending Schedule I to include any future United States registered copyrights or
applications therefor of Grantors. Notwithstanding the foregoing, no failure to so modify this
Copyright Security Agreement or amend Schedule I shall in any way affect, invalidate or
detract from Secured Party’s continuing security interest in all Collateral, whether or not listed
on Schedule I.

     11. COUNTERPARTS. This Copyright Security Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument. In proving this Copyright Security
Agreement in any judicial proceedings, it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom such enforcement is sought. Any
signatures delivered by a party by facsimile transmission or by e-mail transmission shall be deemed
an original signature hereto.

     12. CONSTRUCTION. Unless the context of this Copyright Security Agreement clearly
requires otherwise, the definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation,” whether or not so
expressly stated in each such instance and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The word “will” shall be construed to have
the same meaning and effect as the word “shall.” Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Copyright Security Agreement in its
entirety and not to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Copyright Security Agreement and (e) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities, accounts and contract
rights. References in this Copyright Security Agreement to “determination” by Secured Party
include estimates honestly made by Secured Party (in the case of quantitative determinations) and
beliefs honestly held by Secured Party (in the case of qualitative determinations). Any reference
herein to the satisfaction or repayment in full of the Secured Obligations shall mean the repayment
in full in cash (or cash collateralization in accordance with

2

 

the terms hereof) of all Secured Obligations other than unasserted contingent indemnification
Secured Obligations. Any requirement of a writing contained herein shall be satisfied by the
transmission of a Record and any Record so transmitted shall constitute a representation and
warranty as to the accuracy and completeness of the information contained therein.

[signature page follows]

3

 

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

	 	 	 	 	 	 	 
	          GRANTORS:	 	LOUD TECHNOLOGIES INC.,	 	 
	 	 	a Washington corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MACKIE DESIGN INC.,	 	 
	 	 	a Washington corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SIA SOFTWARE COMPANY, INC.,	 	 
	 	 	a New York corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ST. LOUIS MUSIC, INC.,	 	 
	 	 	a Missouri corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

COPYRIGHT
SECURITY AGREEMENT

4

 

	 	 	 	 	 	 	 
	SECURED PARTY:	 	SUN MACKIE LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

5

 

SCHEDULE I

TO

COPYRIGHT SECURITY AGREEMENT

Copyright Registrations

	 	 	 	 	 	 	 	 	 
	Grantor	 	Country	 	Copyright	 	Registration No.	 	Registration Date
	 

	 	 
	 	 
	 	 
	 	 

Copyright Licenses

COPYRIGHT SECURITY AGREEMENT

 

 

EXHIBIT B

PATENT SECURITY AGREEMENT

     This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this                      day
of                                         , 200                    , among the Grantors listed on the signature pages hereof (collectively,
jointly and severally, “Grantors” and each individually “Grantor”), and SUN MACKIE
LLC, a Delaware limited liability company, (together with its successors and assigns, if any, in
such capacity “Secured Party”).

W I T N E S S E T H:

     WHEREAS, that certain Senior Subordinated Promissory Note dated as of October 19, 2006 (as
amended, restated, supplemented or otherwise modified from time to time, including all exhibits and
schedules thereto, the “Subordinated Note”) executed by LOUD TECHNOLOGIES INC., a
Washington corporation (“Borrower”) is issued in favor of the Secured Party and pursuant to
the Subordinated Note, each of the Grantors listed on the signature pages thereto has guaranteed
the obligations of the Borrower in favor of the Secured Party, and

     WHEREAS, Secured Party is willing to issue the Subordinated Note, but only upon the condition,
among others, that Grantors shall have executed and delivered to Secured Party, that certain
Security Agreement of even date herewith (including all annexes, exhibits or schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and

     WHEREAS, pursuant to the Security Agreement, Grantors are required to execute and deliver to
Secured Party this Patent Security Agreement;

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Grantor hereby agrees as follows:

     13. DEFINED TERMS. All capitalized terms used but not otherwise defined herein have
the meanings given to them in the Security Agreement.

     14. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor hereby grants to
Secured Party, a continuing priority security interest in all of such Grantor’s right, title and
interest in, to and under the following, whether presently existing or hereafter created or
acquired (collectively, the “Patent Collateral”):

          (a) all of its Patents and Patent Intellectual Property Licenses to which it is a party
including those referred to on Schedule I hereto;

          (b) all goodwill, trade secrets, proprietary or confidential information, technical
information, procedures, formulae, quality control standards, designs, operating and training
manuals, customer lists, and other General Intangibles with respect to the foregoing;

          (c) all reissues, continuations or extensions of the foregoing; and

          (d) all products and proceeds of the foregoing, including, any claim by such Grantor against
third parties for past, present or future infringement of any Patent or any Patent licensed under
any Intellectual Property License.

 

 

     15. SECURITY FOR SECURED OBLIGATIONS. This Patent Security Agreement and the Security
Interest created hereby secures the payment and performance of all the Secured Obligations, whether
now existing or arising hereafter. Without limiting the generality of the foregoing, this Patent
Security Agreement secures the payment of all amounts which constitute part of the Secured
Obligations and would be owed by Grantors, or any of them, to Secured Party, whether or not they
are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any
Grantor.

     16. SECURITY AGREEMENT. The Security Interests granted pursuant to this Copyright
Security Agreement are granted in conjunction with the Security Interests granted to Secured Party
pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights
and remedies of Secured Party with respect to the Security Interest in the Patent Collateral made
and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.

     17. AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new
patentable inventions or become entitled to the benefit of any patent application or patent for any
reissue, division, or continuation, of any patent, the provisions of this Patent Security Agreement
shall automatically apply thereto. Grantors shall give prompt notice in writing to Secured Party
with respect to any such new patent rights as provided in the Security Agreement. Without limiting
Grantors’ obligations under this Section 5, Grantors hereby authorize Secured Party
unilaterally to modify this Agreement by amending Schedule I to include any such new patent
rights of Grantors. Notwithstanding the foregoing, no failure to so modify this Patent Security
Agreement or amend Schedule I shall in any way affect, invalidate or detract from Secured
Party’s continuing security interest in all Collateral, whether or not listed on Schedule
I.

     18. COUNTERPARTS. This Patent Security Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument. In proving this Patent Security
Agreement in any judicial proceedings, it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom such enforcement is sought. Any
signatures delivered by a party by facsimile transmission or by e-mail transmission shall be deemed
an original signature hereto.

     7. CONSTRUCTION. Unless the context of this Patent Security Agreement clearly
requires otherwise, the definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation,” whether or not so
expressly stated in each such instance and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The word “will” shall be construed to have
the same meaning and effect as the word “shall.” Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Patent Security Agreement in its
entirety and not to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Patent Security Agreement and (e) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and contract rights.
References in this Patent Security Agreement to “determination” by Secured Party include estimates
honestly made by Secured Party (in the case of

2

 

quantitative determinations) and beliefs honestly held by Secured Party (in the case of
qualitative determinations). Any reference herein to the satisfaction or repayment in full of the
Secured Obligations shall mean the repayment in full in cash (or cash collateralization in
accordance with the terms hereof) of all Secured Obligations other than unasserted contingent
indemnification Secured Obligations. Any requirement of a writing contained herein shall be
satisfied by the transmission of a Record and any Record so transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the information contained
therein.

[signature page follows]

3

 

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

	 	 	 	 	 	 	 
	          GRANTORS:	 	LOUD TECHNOLOGIES INC.,	 	 
	 	 	a Washington corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MACKIE DESIGN INC.,	 	 
	 	 	a Washington corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SIA SOFTWARE COMPANY, INC.,	 	 
	 	 	a New York corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ST. LOUIS MUSIC, INC.,	 	 
	 	 	a Missouri corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

PATENT SECURITY AGREEMENT

4

 

	 	 	 	 	 	 	 
	          SECURED PARTY:	 	SUN MACKIE LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:	 	 

	 	 
	 

	 	Title:	 	 	 	 

5

 

SCHEDULE I

to

PATENT SECURITY AGREEMENT

Patent Registrations/Applications

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Application/	 	 
	Grantor	 	Country	 	Patent	 	Registration No.	 	App/Reg Date
	 	 	 	 	 	 	 	 	 

Patent Licenses

PATENT SECURITY AGREEMENT

6

 

EXHIBIT C

PLEDGED INTERESTS ADDENDUM

     This Pledged Interests Addendum, dated as of                      ___, 200___, is delivered pursuant to
Section 6 of the Security Agreement referred to below. The undersigned hereby agrees that
this Pledged Interests Addendum may be attached to that certain Security Agreement, dated as of
                     ___, 2008 (as amended, restated, supplemented or otherwise modified from time to time,
the “Security Agreement”), made by the undersigned, together with the other Grantors named
therein, to SUN MACKIE LLC, a Delaware limited liability company, as Secured Party. Initially
capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the
Security Agreement or Subordinated Note. The undersigned hereby agrees that the additional
interests listed on this Pledged Interests Addendum as set forth below shall be and become part of
the Pledged Interests pledged by the undersigned to the Secured Party in the Security Agreement and
any pledged company set forth on this Pledged Interests Addendum as set forth below shall be and
become a “Pledged Company” under the Security Agreement, each with the same force and effect as if
originally named therein.

     The undersigned hereby certifies that the representations and warranties set forth in
Section 4 of the Security Agreement of the undersigned are true and correct as to the
Pledged Interests listed herein on and as of the date hereof.

	 	 	 	 	 	 	 
	 	 	[___________________]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 

	 	Title	 	 	 	 
	 

	 	 	 	 	 	 

PLEDGED INTERESTS ADDENDUM

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Percentage	 	 
	 	 	 	 	Name of Pledged	 	Number of	 	Class of	 	of Class	 	Certificate
	Name of Pledgor	 	Company	 	Shares/Units	 	Interests	 	Owned	 	Nos.

PLEDGED INTERESTS ADDENDUM

 

 

EXHIBIT D

TRADEMARK SECURITY AGREEMENT

     This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made this
___day of                     , 200___, among Grantors listed on the signature pages hereof (collectively,
jointly and severally, “Grantors” and each individually “Grantor”), and SUN MACKIE
LLC, a Delaware limited liability company, (together with its successors and assigns, if any, in
such capacity “Secured Party”).

W I T N E S S E T H:

     WHEREAS, that certain Senior Subordinated Promissory Note dated as of October 19, 2006 (as
amended, restated, supplemented or otherwise modified from time to time, including all exhibits and
schedules thereto, the “Subordinated Note”) executed by LOUD TECHNOLOGIES INC., a
Washington corporation (“Borrower”) is issued in favor of the Secured Party and pursuant to
the Subordinated Note, each of the Grantors listed on the signature pages thereto has guaranteed
the obligations of the Borrower in favor of the Secured Party, and

     WHEREAS, Secured Party is willing to issue the Subordinated Note, but only upon the condition,
among others, that Grantors shall have executed and delivered to Secured Party, that certain
Security Agreement of even date herewith (including all annexes, exhibits or schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and

     WHEREAS, pursuant to the Security Agreement, Grantors are required to execute and deliver to
Secured Party this Trademark Security Agreement;

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Grantor hereby agrees as follows:

     19. DEFINED TERMS. All capitalized terms used but not otherwise defined herein have
the meanings given to them in the Security Agreement.

     20. GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL. Each Grantor hereby grants to
Secured Party a continuing priority security interest in all of such Grantor’s right, title and
interest in, to and under the following, whether presently existing or hereafter created or
acquired (collectively, the “Trademark Collateral”):

          (a) all of its Trademarks and Trademark Intellectual Property Licenses to which it is a party
including those referred to on Schedule I hereto;

          (b) all goodwill, trade secrets, proprietary or confidential information, technical
information, procedures, formulae, quality control standards, designs, operating and training
manuals, customer lists, and other General Intangibles with respect to the foregoing;

          (c) all reissues, continuations or extensions of the foregoing;

          (d) all goodwill of the business connected with the use of, and symbolized by, each Trademark
and each Trademark Intellectual Property License; and

TRADEMARK SECURITY AGREEMENT

 

 

          (e) all products and proceeds of the foregoing, including, any claim by such Grantor against
third parties for past, present or future (i) infringement or dilution of any Trademark or any
Trademark licensed under any Intellectual Property License or (ii) injury to the goodwill
associated with any Trademark or any Trademark licensed under any Intellectual Property License.

     21. SECURITY FOR SECURED OBLIGATIONS. This Trademark Security Agreement and the
Security Interest created hereby secures the payment and performance of all the Secured
Obligations, whether now existing or arising hereafter. Without limiting the generality of the
foregoing, this Trademark Security Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them, to Secured Party,
whether or not they are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any Grantor.

     22. SECURITY AGREEMENT. The Security Interests granted pursuant to this Copyright
Security Agreement are granted in conjunction with the Security Interests granted to Secured Party
pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights
and remedies of Secured Party with respect to the Security Interest in the Trademark Collateral
made and granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth herein.

     23. AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new
trademarks, the provisions of this Trademark Security Agreement shall automatically apply thereto.
Grantors shall give prompt notice in writing to Secured Party with respect to any such new
trademarks or renewal or extension of any trademark registration as provided in the Security
Agreement. Without limiting Grantors’ obligations under this Section 5, Grantors hereby
authorize Secured Party unilaterally to modify this Agreement by amending Schedule I to
include any such new trademark rights of Grantors. Notwithstanding the foregoing, no failure to so
modify this Trademark Security Agreement or amend Schedule I shall in any way affect,
invalidate or detract from Secured Party’s continuing security interest in all Collateral, whether
or not listed on Schedule I.

     24. COUNTERPARTS. This Trademark Security Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument. In proving this Trademark Security
Agreement in any judicial proceedings, it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom such enforcement is sought. Any
signatures delivered by a party by facsimile transmission or by e-mail transmission shall be deemed
an original signature hereto.

     7. CONSTRUCTION. Unless the context of this Trademark Security Agreement clearly
requires otherwise, the definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation,” whether or not so
expressly stated in each such instance and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The word “will” shall be construed to have
the same meaning and effect as the word “shall.” Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Trademark Security Agreement in its
entirety and not to any particular provision hereof, (d) all references herein to Articles,

2

 

Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Trademark Security Agreement and (e) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities, accounts and contract
rights. References in this Trademark Security Agreement to “determination” by Secured Party
include estimates honestly made by Secured Party (in the case of quantitative determinations) and
beliefs honestly held by Secured Party (in the case of qualitative determinations). Any reference
herein to the satisfaction or repayment in full of the Secured Obligations shall mean the repayment
in full in cash (or cash collateralization in accordance with the terms hereof) of all Secured
Obligations other than unasserted contingent indemnification Secured Obligations. Any requirement
of a writing contained herein shall be satisfied by the transmission of a Record and any Record so
transmitted shall constitute a representation and warranty as to the accuracy and completeness of
the information contained therein.

[signature page follows]

3

 

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

	 	 	 	 	 	 	 
	 	 	GRANTORS:	 	LOUD TECHNOLOGIES INC.,

a Washington corporation
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	MACKIE DESIGN INC.,

a Washington corporation
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	SIA SOFTWARE COMPANY, INC.,

a New York corporation
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	ST. LOUIS MUSIC, INC.,

a Missouri corporation
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

TRADEMARK SECURITY AGREEMENT

 

 

	 	 	 	 	 	 	 
	 	 	SECURED PARTY:	 	SUN MACKIE LLC,

a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

2

 

SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT

Trademark Registrations/Applications

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Application/	 	 
	Grantor	 	Country	 	Mark	 	Registration No.	 	App/Reg Date
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

PATENT SECURITY AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]