Document:

Exhibit 10.2

 

Exhibit 10.2

THIRD AMENDED AND RESTATED PLEDGE AGREEMENT

          PLEDGE AGREEMENT, dated as of July 15, 2003, as amended and restated as of July 30, 2004, as
amended and restated as of May 31, 2006, and as further amended and restated as of June 28, 2007
(as so amended and restated and as the same may be further amended, restated, supplemented and/or
otherwise modified from time to time, this “Agreement”), made by each of the undersigned in
its capacity as a pledgor (together with any other entity that becomes a party hereto pursuant to
Section 23 hereof, each, a “Pledgor” and, collectively, the “Pledgors”), in favor
of JPMORGAN CHASE BANK, N.A., as Collateral Agent (including any successor collateral agent, the
“Pledgee”) for the benefit of the Secured Creditors (as defined below). Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement referred to below
shall be used herein as therein defined.

W I T N E S S E T H:

          WHEREAS, Reynolds American Inc. (the “Borrower”), the various lending institutions
from time to time party thereto (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as
Administrative Agent (the “Administrative Agent”), have entered into a Credit Agreement,
dated as of May 7, 1999, as amended and restated as of November 17, 2000, as further amended and
restated as of May 10, 2002, as further amended and restated as of July 30, 2004, as further
amended and restated as of May 31, 2006, and as further amended and restated as of June 28, 2007,
providing for the making of Loans to the Borrower and the issuance of, and participation in,
Letters of Credit for the account of the Borrower, all as contemplated therein (with (i) the
Lenders, the Swingline Lenders, each Letter of Credit Issuer, the Administrative Agent, the Lead
Agents, the Pledgee and the Collateral Agent being herein called the “Lender Creditors” and
(ii) the term “Credit Agreement” as used herein to mean the Credit Agreement described
above in this paragraph, as the same may be further amended, modified, extended, renewed, replaced,
restated, supplemented and/or refinanced from time to time, and including any agreement extending
the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of
additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any
portion of, the indebtedness under such agreement or any successor agreement, whether or not with
the same agent, trustee, representative, lenders or holders; provided that, with respect to
any agreement providing for the refinancing or replacement of indebtedness under the Credit
Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder
if (x) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be
paid in full at the time of such refinancing or replacement, and all commitments and letters of
credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in
accordance with their terms or (B) the Required Lenders shall have consented in writing to the
refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit
Agreement, and (y) a notice to the effect that the refinancing or replacement indebtedness shall be
treated as issued under the Credit Agreement shall be delivered by the Borrower to the Collateral
Agent);
 

 

 

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered
into, and/or may in the future from time to time enter into, one or more agreements or arrangements
with JPMCB or any of its affiliates (even if JPMCB ceases to be a Lender under the Credit Agreement
for any reason (JPMCB, any such affiliate and their respective successors and assigns, each, a
“Credit Card Issuer”)) providing for credit card loans made available to certain employees
of the Borrower and/or one or more of its Subsidiaries (each such agreement or arrangement with a
Credit Card Issuer, a “Secured Credit Card Agreement”);

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered
into, and/or may in the future from time to time enter into, one or more (i) interest rate
protection agreements (including, without limitation, interest rate swaps, caps, floors, collars
and similar agreements), and/or (ii) foreign exchange contracts, currency swap agreements,
commodity agreements or other similar agreements or arrangements designed to protect against the
fluctuations in currency or commodity values (each such agreement or arrangement with a Hedging
Creditor (as hereinafter defined), a “Secured Hedging Agreement”), with any Lender, any
affiliate thereof or a syndicate of financial institutions organized by a Lender or an affiliate of
a Lender (even if any such Lender ceases to be a Lender under the Credit Agreement for any reason)
(any such Lender, affiliate or other such financial institution that participates therein, and in
each case their subsequent successors and assigns, collectively, the “Hedging Creditors”,
and together with the Lender Creditors and each Credit Card Issuer, the “Lender Secured
Creditors”);

          WHEREAS, the Borrower and the New Senior Notes Trustee, on behalf of the holders of the New
Senior Notes, have entered into the New Senior Notes Indenture, providing for the issuance from
time to time of New Senior Notes by the Borrower;

          WHEREAS, the Borrower and the Refinancing Senior Notes Trustee, on behalf of the holders of
the Refinancing Senior Notes, may from time to time enter into the Refinancing Senior Notes
Indenture, providing for the issuance from time to time of Refinancing Senior Notes by the
Borrower;

          WHEREAS, pursuant to the Subsidiary Guaranty, each Pledgor (other than the Borrower) has
jointly and severally guaranteed to the Lender Secured Creditors the payment when due of the
Guaranteed Obligations (as defined in the Subsidiary Guaranty);

          WHEREAS, pursuant to the Borrower Guaranty, the Borrower has guaranteed to the Hedging
Creditors and the Credit Card Issuers the payment when due of the Guaranteed Obligations;

          WHEREAS, each Specified RAI Senior Notes Pledgor (other than the Borrower) has jointly and
severally guaranteed to the New Senior Notes Creditors the payment when due of principal and
interest on the New Senior Notes;

          WHEREAS, each Specified RAI Senior Notes Pledgor (other than the Borrower) may from time to
time jointly and severally guarantee to the Refinancing Senior Notes Creditors the payment when due
of principal and interest on the Refinancing Senior Notes;

          WHEREAS, certain of the Pledgors have heretofore entered into a Pledge Agreement, dated as of
July 15, 2003, as amended and restated as of July 30, 2004, and as

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further amended and restated as of May 31, 2006 (as so amended and restated and as the same
may be further amended, restated, modified and/or supplemented from time to time to, but not
including, the date hereof, the “Second Amended and Restated Pledge Agreement”);

          WHEREAS, the Pledgors desire to further amend and restate the Second Amended and Restated
Pledge Agreement in the form of this Agreement;

          WHEREAS, the Credit Agreement requires this Agreement be executed and delivered to the Pledgee
by the Pledgors and the Secured Credit Card Agreements, the Secured Hedging Agreements and the New
Senior Notes Indenture require that this Agreement secure the respective Obligations as provided
herein;

          WHEREAS, each Pledgor desires to execute this Agreement to satisfy the requirements described
in the preceding paragraph;

          NOW, THEREFORE, in consideration of the benefits accruing to each Pledgor, the receipt and
sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following
representations and warranties to the Pledgee and hereby covenants and agrees with the Pledgee as
follows:

          1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor for the benefit
of the relevant Secured Creditors to secure:

     (i) the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in
connection with each Credit Document to which such Pledgor is a party (including, without
limitation, indemnities, fees and interest (including all interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of the Borrower or any other Credit Party at the rate
provided for in the respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding)) and the due performance of and compliance by
each Pledgor with the terms of each such Credit Document (all such obligations and
liabilities under this clause (i), except to the extent consisting of obligations or
liabilities with respect to Secured Credit Card Agreements and Secured Hedging Agreements,
being herein collectively called the “Credit Document Obligations”);

     (ii) the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in
connection with each Secured Credit Card Agreement, including, all obligations, if any, of
each Pledgor under its Guaranty in respect of Secured Credit Card Agreements (all
such obligations and liabilities under this clause (ii) being herein collectively called the
“Credit Card Obligations”);

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     (iii) the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in
connection with each Secured Hedging Agreement, including, all obligations, if any, of each
Pledgor under its Guaranty in respect of Secured Hedging Agreements (all such obligations
and liabilities under this clause (iii) being herein collectively called the “Hedging
Obligations”);

     (iv) the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in
connection with each New Senior Notes Document to which it is a party (including all
interest that accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower
or any other Credit Party at the rate provided for in the respective documentation, whether
or not a claim for post-petition interest is allowed in any such proceeding) and the due
performance and compliance by each Pledgor with the terms of each such New Senior Notes
Document (all such obligations and liabilities under this clause (iv) being herein
collectively called the “New Senior Notes Obligations”);

     (v) the full and prompt payment when due (whether at stated maturity, by acceleration
or otherwise) of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Pledgor, now existing or hereafter incurred under, arising out of or in connection with each
Refinancing Senior Notes Document to which it is a party (including all interest that
accrues after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other
Credit Party at the rate provided for in the respective documentation, whether or not a
claim for post-petition interest is allowed in any such proceeding) and the due performance
and compliance by each Pledgor with the terms of each such Refinancing Senior Notes Document
(all such obligations and liabilities under this clause (v), being herein collectively
called the “Refinancing Senior Notes Obligations”);

     (vi) any and all sums advanced by the Pledgee in order to preserve the Collateral
and/or its security interest therein;

     (vii) in the event of any proceeding for the collection of the Obligations (as defined
below) or the enforcement of this Agreement, after an Event of Default shall have occurred
and be continuing, the reasonable expenses of retaking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, or of any
exercise by the Pledgee of its rights hereunder, together with reasonable attorneys’ fees
and court costs; and

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     (viii) all amounts paid by any Secured Creditor as to which such Secured Creditor has
the right to reimbursement under Section 11 of this Agreement;

all such obligations, liabilities, sums and expenses set forth in clauses (i) through (viii) of
this Section 1 being herein collectively called the “Obligations”.

          2. DEFINITIONS; REPRESENTATIONS. (a) The following capitalized terms used herein
shall have the definitions specified below:

          “Additional Senior Notes” shall have the meaning provided in the Credit Agreement.

          “Adverse Claim” has the meaning given such term in Section 8-102(a)(1) of the UCC.

          “Agreement” shall have the meaning set forth in the first paragraph of this Agreement.

          “Applicable Obligations” shall mean (i) for each Pledgor that is a Specified RAI
Senior Notes Pledgor, all the Obligations and (ii) for each Pledgor that is not a Specified RAI
Senior Notes Pledgor, all the Obligations other than the New Senior Notes Obligations and the
Refinancing Senior Notes Obligations, provided that (x) the New Senior Notes Obligations
shall be excluded from the Applicable Obligations of a Specified RAI Senior Notes Pledgor, to the
extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured
pursuant to this Agreement, and (y) the Refinancing Senior Notes Obligations shall be excluded from
the Applicable Obligations of a Specified RAI Senior Notes Pledgor, to the extent the Refinancing
Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured
pursuant to this Agreement.

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

          “CA Termination Date” shall have the meaning set forth in Section 18 hereof.

          “Certificated Security” has the meaning given such term in Section 8-102(a)(4) of the
UCC.

          “Class” shall have the meaning provided in Section 20 hereof.

          “Clearing Corporation” has the meaning given such term in Section 8-102(a)(5) of the
UCC.

          “Collateral” shall have the meaning provided in Section 3.1 hereof.

          “Collateral Accounts” means any and all accounts established and maintained by the
Pledgee in the name of any Pledgor to which Collateral may be credited.

          “Collateral Proceeds” shall have the meaning provided in Section 9 hereof.

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

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

          “Credit Card Obligations” shall have the meaning provided in Section 1 hereof.

          “Credit Document Obligations” shall have the meaning provided in Section 1 hereof.

          “Designated RAI Senior Notes Collateral” shall mean, with respect to any Specified RAI
Senior Notes Pledgor, Collateral owned by such Specified RAI Senior Notes Pledgor consisting of (i)
any Principal Property of such Specified RAI Senior Notes Pledgor and (ii) any shares of stock, all
indebtedness and other obligations of or owing by Reynolds Tobacco owned or held by such Specified
RAI Senior Notes Pledgor.

          “Event of Default” shall mean and include (i) any Event of Default under the Credit
Agreement, (ii) any “event of default” under the New Senior Notes Documents or the Refinancing
Senior Notes Documents and (iii) any payment default (after the expiration of any applicable grace
period) under any Secured Credit Card Agreement or any Secured Hedging Agreement.

          “Exchange Senior Notes” shall have the meaning provided in the Credit Agreement.

          “Excluded Domestic Entities” shall mean and include any Subsidiary of RJRTH (other
than Reynolds Tobacco).

          “Excluded Foreign Entities” shall mean and include one or more direct Subsidiaries of
any Pledgor that is not a Domestic Subsidiary and is (x) a Subsidiary of RJRTH or (y) designated as
an “Excluded Foreign Entity” by the Borrower pursuant to a written notice delivered to the Pledgee;
provided that if at the time of the delivery (or required delivery) of the financial
statements of the Borrower pursuant to Section 7.01(a) or (b) of the Credit Agreement, either (i)
the aggregate book value of the assets of any Excluded Foreign Entity (determined on a
consolidating basis) as at the last day of the fiscal quarter or fiscal year, as the case may be,
to which such financial statements relate is equal to or greater than $100,000,000 or (ii) the net
sales of any Excluded Foreign Entity (determined on a consolidating basis) as at the last day of
the fiscal quarter or fiscal year, as the case may be, to which such financial statements relate is
equal to or greater than $100,000,000 (provided that such net sales shall be determined on
a pro forma basis for the 12 months last ended when determining whether any Person
that is the survivor of any merger or consolidation or that is the transferee of any property or
assets from other Subsidiaries of the Borrower is a Material Subsidiary), then on the 90th day
following the delivery (or required delivery) of such financial statements, such entity shall cease
to be an “Excluded Foreign Entity” for purposes of this Agreement.

          “Excluded Investment Entities” shall mean and include (i) Targacept, Inc., a Delaware
corporation, (ii) Technology Concepts & Design, Inc., a Virginia corporation, (iii)

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Intellilink
Services, Inc., a Georgia corporation, (iv) Large Scale Biology Corporation, (v) R. J.
Reynolds-Gallaher International Sarl, a Swiss Company, (vi) Gallaher-Reynolds Equipment Company, an
Irish Company, (vii) LS, Inc. and (viii) preferred stock and/or “income notes” of any investment
vehicle owned by the Borrower or any of its Subsidiaries, so long as (x) such investment vehicle
invests solely in debt securities; and (y) either: (I) such preferred stock and/or “income notes”
of such investment vehicle are owned by the Borrower or its Subsidiaries on the Fifth Restatement
Effective Date; or (II) the aggregate amount of cash used to acquire such preferred stock and/or
“income notes” after the Fifth Restatement Effective Date does not exceed $35,000,000.00.

          “Excluded RJRTH Foreign Subsidiary” shall mean any Subsidiary of RJRTH that is not a
Domestic Subsidiary of RJRTH.

          “Financial Asset” has the meaning given such term in Section 8-102(a)(9) of the UCC,
provided that the term “Financial Asset” shall not include (i) any capital stock or other
equity interests of any Excluded Domestic Entity or any Excluded Investment Entity or (ii) any
Margin Stock.

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

          “Hedging Obligations” shall have the meaning provided in Section 1 hereof.

          “Indemnitees” shall have the meaning set forth in Section 11 hereof.

          “Initial New Senior Notes” shall mean, collectively, (i) the Borrower’s 7.25% Senior
Secured Notes due 2013 in an initial aggregate principal amount equal to $625,000,000, (ii) the
Borrower’s 7.625% Senior Secured Notes due 2016 in an initial aggregate principal amount equal to
$775,000,000 and (iii) the Borrower’s 7.75% Senior Secured Notes due 2018 in an initial aggregate
principal amount equal to $250,000,000, in each case issued pursuant to the New Senior Notes
Indenture, as in effect on the Fourth Restatement Effective Date and as the same may be amended,
modified and/or supplemented from time to time in accordance with the terms thereof and the Credit
Agreement.

          “Instrument” has the meaning given such term in Section 9-102(a)(47) of the UCC.

          “Investment Property” has the meaning given such term in Section 9-102(a)(49) of the
UCC, provided that the term “Investment Property” shall not include (i) any capital stock
or other Equity Interests of any Excluded Domestic Entity, any Excluded Investment Entity or any
Excluded RJRTH Foreign Subsidiary or (ii) any Margin Stock.

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

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

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

          “Limited Liability Company Assets” shall mean all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation, all limited
liability company capital and interests in other limited liability companies), at any time owned or
represented by any Limited Liability Company Interest.

          “Limited Liability Company Interest” shall mean the entire limited liability company
interest at any time directly owned by each Pledgor in any limited liability company;
provided that the term “Limited Liability Company Interest” shall not include any limited
liability company interest of any Excluded Domestic Entity, any Excluded Investment Entity or any
Excluded RJRTH Foreign Subsidiary (with any limited liability company the equity interests of which
are required to be included as “Limited Liability Company Interests” hereunder being herein called
a “Pledged LLC”).

          “LSB Note” shall mean that certain Non-Recourse Secured Promissory Note, dated May 14,
1997, made by Technology Directors II, LLC to R.J. Reynolds Tobacco Company (as assignee of
Reynolds Technologies, Inc.) as amended from time to time, in an initial aggregate principal amount
of $15,000,000.

          “New Senior Notes” shall mean (i) the Initial New Senior Notes, (ii) the Exchange
Senior Notes and (iii) the Additional Senior Notes, in each case as the same may be amended,
modified and/or supplemented from time to time in accordance with the terms thereof and the Credit
Agreement.

          “New Senior Notes Creditors” shall mean the New Senior Notes Trustee and the holders
of the New Senior Notes.

          “New Senior Notes Documents” shall mean the New Senior Notes and the New Senior Notes
Indenture.

          “New Senior Notes Indenture” shall mean the Indenture, dated as of May 31, 2006, among
the Borrower, the Subsidiary Guarantors and The Bank of New York, as trustee, as in effect on the
Fifth Restatement Effective Date and as the same may be amended, modified and/or supplemented from
time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes Obligations” shall have the meaning provided in Section 1 hereof.

          “New Senior Notes Trustee” shall mean the trustee under the New Senior Notes
Indenture.

          “Notes” shall mean all promissory notes at any time issued to, or held by, any
Pledgor, provided that the term “Note” shall not include the LSB Note.

          “Noticed Event of Default” shall have the meaning provided in Section 5 hereof.

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          “Notified Non-Credit Agreement Event of Default” means (i) the acceleration of the
maturity of any New Senior Notes or Refinancing Senior Notes or the failure to pay at maturity any
New Senior Notes or Refinancing Senior Notes, or the occurrence of any bankruptcy or insolvency
Event of Default under the New Senior Notes Indenture or the Refinancing Senior Notes Indenture,
(ii) any Event of Default under a Secured Credit Card Agreement or (iii) any Event of Default under
a Secured Hedging Agreement, in the case of any event described in clause (i), (ii) or (iii) to the
extent the New Senior Notes Trustee or the Refinancing Senior Notes Trustee, the relevant Credit
Card Issuer or the relevant Hedging Creditor, as the case may be, has given written notice to the
Collateral Agent that a “Notified Non-Credit Agreement Event of Default” exists; provided
that such written notice may only be given if such Event of Default is continuing and, provided
further, that any such Notified Non-Credit Agreement Event of Default shall cease to exist (I)
once there is no longer any Event of Default under the New Senior Notes Indenture, the Refinancing
Senior Notes Indenture, the respective Secured Credit Card Agreement or the respective Secured
Hedging Agreement, as the case may be, in existence, (II) in the case of an Event of Default under
the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, after all New Senior
Notes Obligations or Refinancing Senior Notes Obligations, as the case may be, have been repaid in
full, (III) in the case of an Event of Default under a Secured Credit Card Agreement or Secured
Hedging Agreement, such Secured Credit Card Agreement or Secured Hedging Agreement, as the case may
be, has been terminated and all Credit Card Obligations or Hedging Obligations, as the case may be,
thereunder have been repaid in full, (IV) in the case of an Event of Default under the New Senior
Notes Indenture or the Refinancing Senior Notes Indenture, if the New Senior Notes Creditors or the
Refinancing Senior Notes Creditors, as the case may be, holding at least a majority of the
aggregate principal amount of the outstanding New Senior Notes or the Refinancing Senior Notes, as
the case may be, at such time have rescinded such written notice and (V) in the case of an Event of
Default under a Secured Credit Card Agreement or Secured Hedging Agreement, the requisite Credit
Card Issuers with Credit Card Obligations or Hedging Creditors with Hedging Obligations, as the
case may be, thereunder at such time have rescinded such written notice.

          “Obligations” shall have the meaning provided in Section 1 hereof.

          “Partnership Assets” shall mean all assets, whether tangible or intangible and whether
real, personal or mixed (including, without limitation, all partnership capital and interests in
other partnerships), at any time owned or represented by any Pledged Partnership or represented by
any Partnership Interest.

          “Partnership Interest” shall mean the entire partnership interests (whether general
and/or limited partnership interests) at any time directly owned by each Pledgor in any
partnership; provided that the term “Partnership Interest” shall not include any
partnership interest of any Excluded Domestic Entity, any Excluded Investment Entity or any
Excluded RJRTH Foreign Subsidiary (with any partnership the partnership interests of which are
required to be included as “Partnership Interests” hereunder being herein called a “Pledged
Partnership”).

          “Pledged Entity” shall mean each Pledged Partnership and each Pledged LLC.

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          “Pledged Notes” shall mean all Notes at any time pledged or required to be pledged
hereunder.

          “Pledged Limited Liability Company Interests” shall mean all Limited Liability Company
Interests at any time pledged or required to be pledged hereunder.

          “Pledged LLC” shall have the meaning provided in the definition of “Limited Liability
Company Interest”.

          “Pledged Partnership” shall have the meaning provided in the definition of
“Partnership Interest”.

          “Pledged Partnership Interests” shall mean all Partnership Interests at any time
pledged or required to be pledged hereunder.

          “Pledgee” shall have the meaning provided in the first paragraph of this Agreement.

          “Pledgor” shall have the meaning provided in the first paragraph of this Agreement.

          “Principal Property” shall have the meaning provided in the New Senior Notes Indenture
or the Refinancing Senior Notes Indenture (in each case as in effect on the date hereof), as the
context may require.

          “Proceeds” has the meaning given such term in Section 9-102(a)(64) of the UCC.

          “Pro Rata Share” shall have the meaning provided in Section 9 hereof.

          “RAI Senior Notes Obligations” shall mean, collectively, the New Senior Notes
Obligations and the Refinancing Senior Notes Obligations.

          “Refinancing Senior Notes” shall have the meaning provided in the Credit Agreement.

          “Refinancing Senior Notes Creditors” shall mean the Refinancing Senior Notes Trustee
and the holders of the Refinancing Senior Notes.

          “Refinancing Senior Notes Documents” shall mean, collectively, the Refinancing Senior
Notes and the Refinancing Senior Notes Indenture.

          “Refinancing Senior Notes Indenture” shall mean one or more indentures entered into
from time to time providing for the issuance of Refinancing Senior Notes by the Borrower, in each
case as the same may be amended, modified and/or supplemented from time to time in accordance with
the terms thereof and the Credit Agreement.

          “Refinancing Senior Notes Obligations” shall have the meaning provided in Section 1
hereof.

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          “Refinancing Senior Notes Trustee” shall mean, collectively, the trustee and/or
trustees under the Refinancing Senior Notes Indenture.

          “Requisite Creditors” shall have the meaning provided in Section 20 hereof.

          “Restricted Pledgor” shall mean Lane and Santa Fe.

          “Secured Credit Card Agreements” shall have the meaning set forth in the recitals to
this Agreement.

          “Secured Creditors” shall mean, collectively, the Lender Secured Creditors, the New
Senior Notes Creditors and the Refinancing Senior Notes Creditors.

          “Secured Debt Agreements” shall have the meaning provided in Section 5 hereof.

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

          “Securities Account” has the meaning given such term in Section 8-501(a) of the UCC.

          “Security” and “Securities” has the meaning given such term in Section
8-102(a)(15) of the UCC and shall in any event also include all Stock and all Notes,
provided that the terms “Security” and “Securities” shall not include (i) any capital stock
or other equity interests of any Excluded Domestic Entity, any Excluded Investment Entity or any
Excluded RJRTH Foreign Subsidiary; (ii) any Margin Stock; or (iii) excess capital stock of a
Foreign Corporation not required to be pledged hereunder as a result of the application of the
first proviso appearing in the definition of Stock.

          “Security Entitlement” has the meaning given such term in Section 8-102(a)(17) of the
UCC.

          “Specified RAI Senior Notes Pledgor” shall mean the Borrower and each Pledgor with RAI
Senior Notes Obligations that is a Restricted Subsidiary (as defined in the New Senior Notes
Indenture).

          “Stock” shall mean (i) all of the issued and outstanding shares of stock of any
corporation (other than a corporation that is not organized under the laws of the United States or
any State or territory thereof (a “Foreign Corporation”)) at any time directly owned by any
Pledgor, and (ii) all of the issued and outstanding shares of capital stock of any Foreign
Corporation at any time directly owned by any Pledgor, provided that such Pledgor shall not
be required to pledge hereunder the capital stock of a Foreign Corporation if more than 65% of the
total combined voting power of all classes of capital stock of any Foreign Corporation entitled to
vote are pledged hereunder (after giving effect to the pledge of capital stock of such Foreign
Corporation by other Pledgors hereunder), provided further that the term “Stock”
shall not include (i) any capital stock of any Excluded Domestic Entity, any Excluded Investment
Entity or any Excluded RJRTH Foreign Subsidiary, (ii) any Margin Stock and (iii) excess capital
stock

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of a Foreign Corporation not required to be pledged hereunder as a result of the application
of the preceding proviso.

          “Subsequent Effective Date” shall have the meaning set forth in Section 18 hereof.

          “Termination Date” shall have the meaning set forth in Section 18 hereof.

          “UCC” means the Uniform Commercial Code as in effect on the date hereof in the State
of New York.

          “Uncertificated Security” has the meaning given such term in Section 8-102(a)(18) of
the UCC.

     (b) Each Pledgor represents and warrants that on the date hereof (or, if later, the date it
first becomes party hereto) and on any Subsequent Effective Date: (i) each Subsidiary of such
Pledgor, and the direct ownership thereof, is listed on Annex A hereto; (ii) the Stock held by such
Pledgor consists of the number and type of shares of the stock of the corporations as described in
Annex B hereto; (iii) such Stock constitutes that percentage of the issued and outstanding capital
stock of the issuing corporation as set forth in Annex B hereto; (iv) the Notes held by such
Pledgor consist of the promissory notes described in Annex C hereto; (v) the Limited Liability
Company Interests held by such Pledgor consists of the number and type of interest of the
respective Pledged LLC as described in Annex D hereto; (vi) such Limited Liability Company
Interests held by such Pledgor constitute the percentage of the issued and outstanding equity
interests of the respective Pledged LLC as set forth in Annex D hereto for such Pledgor; (vii)
except for such immaterial exceptions set forth on Annexes B and C as may be reasonably acceptable
to the Pledgee, each such Pledgor is the holder of record and sole beneficial owner of the Stock,
the Notes, the Limited Liability Company Interests, the Partnership Interests and the Securities
identified on Annex G hereto; (viii) the Partnership Interests held by such Pledgor consists of the
number and type of interest of the respective Pledged Partnership as described in Annex E hereto;
(ix) the Partnership Interests held by such Pledgor constitutes that percentage of the entire
Partnership Interest of the respective Pledged Partnership as is set forth in Annex E hereto for
such Pledgor; (x) such Pledgor owns or possesses no other Securities except as described on Annexes
B, C, D, E and G hereto; and (xi) such Pledgor has complied with the respective procedures set
forth in Section 3.2(a) with respect to each item of Collateral described in Annexes B through E
hereto and Annex G hereto that is required by this Agreement to be pledged to the Pledgee on the
date hereof (or the respective Subsequent Effective Date).

          3. PLEDGE OF SECURITIES, ETC.

          3.1 Pledge. To secure the Applicable Obligations of such Pledgor and for the
purposes set forth in Section 1, each Pledgor does hereby grant, pledge and assign to the Pledgee
for the benefit of the relevant Secured Creditors, and does hereby create a continuing security
interest in favor of the Pledgee for the benefit of the relevant Secured Creditors in, all of the
right, title and
interest in and to the following, whether now existing or hereafter from time to time acquired
(collectively, the “Collateral”):

12

 

     (i) each of the Collateral Accounts, including any and all assets of whatever type or
kind deposited by such Pledgor in such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without limitation, all Financial Assets,
Investment Property, moneys, checks, drafts, Instruments, Securities or interests therein of
any type or nature deposited or required by the Credit Agreement or any other Secured Debt
Agreement to be deposited in such Collateral Account, and all investments and all
certificates and other Instruments (including depository receipts, if any) from time to time
representing or evidencing the same, and all dividends, interest, distributions, cash and
other property from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the foregoing;

     (ii) all Securities owned by such Pledgor from time to time and all options and
warrants owned by such Pledgor from time to time to purchase Securities;

     (iii) all Limited Liability Company Interests owned by such Pledgor from time to time
and all of such Pledgor’s right, title and interest in each limited liability company to
which such interests relate, whether now existing or hereafter acquired, including, without
limitation:

     (1) all the capital thereof and its interest in all profits, income, surpluses,
losses, Limited Liability Company Assets, distributions and other payments to which
such Pledgor shall at any time be entitled in respect of such Limited Liability
Company Interests;

     (2) all other payments due or to become due to such Pledgor in respect of
Limited Liability Company Interests, whether under any limited liability company
agreement or otherwise, whether as contractual obligations, damages, insurance
proceeds or otherwise;

     (3) all of its claims, rights, powers, privileges, authority, options, security
interest, liens and remedies, if any, under any limited liability company agreement
or operating agreement, or at law or otherwise in respect of such Limited Liability
Company Interests;

     (4) all present and future claims, if any, of any of such Pledgor against any
such Pledged LLC for moneys loaned or advanced, for services rendered or otherwise;

     (5) all of such Pledgor’s rights under any limited liability company agreement
or operating agreement or at law to exercise and enforce every right, power, remedy,
authority, option and privilege of any of such Pledgor relating to such Limited
Liability Company Interests, including any power to terminate, cancel or modify any
limited liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in the name of any
of such Pledgor in respect of such Limited
Liability Company Interest and any such Pledged LLC, to make determinations, to
exercise any election (including, but not limited to, election of remedies) or

13

 

option or to give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce, collect or
receipt for any of the foregoing or for any Limited Liability Company Asset, to
enforce or execute any checks, or other instruments or orders, to file any claims
and to take any action in connection with any of the foregoing (with all of the
foregoing rights to be exercisable only upon the occurrence and during the
continuation of a Noticed Event of Default); and

     (6) all other property hereafter delivered in substitution for or in addition
to any of the foregoing, all certificates and instruments representing or evidencing
such other property and all cash, securities, interest, dividends, rights and other
property at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;

     (iv) all Partnership Interests owned by such Pledgor from time to time and all of such
Pledgor’s right, title and interest in each partnership to which such interests relate,
whether now existing or hereafter acquired, including, without limitation:

     (1) all of the capital thereof and its interest in all profits, income,
surplus, losses, Partnership Assets, distributions and other payments to which such
Pledgor shall at any time be entitled in respect of any such Partnership Interest;

     (2) all other payments due or to become due to such Pledgor in respect of any
such Partnership Interest, whether under any partnership agreement or otherwise,
whether as contractual obligations, damages, insurance proceeds or otherwise;

     (3) all of its claims, rights, powers, privileges, authority, options, security
interest, liens and remedies, if any, under any partnership or other agreement or at
law or otherwise in respect of any such Partnership Interest;

     (4) all present and future claims, if any, of such Pledgor against any Pledged
Partnership for moneys loaned or advanced, for services rendered or otherwise;

     (5) all of such Pledgor’s rights under any partnership agreement or at law to
exercise and enforce every right, power, remedy, authority, option and privilege of
such Pledgor relating to any Partnership Interest, including any power, if any, to
terminate, cancel or modify any general or limited partnership agreement, to execute
any instruments and to take any and all other action on behalf of and in the name of
such Pledgor in respect of such Partnership Interest and any Pledged Partnership, to
make determinations, to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any notice, consent,
amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect, or receipt for any of the
foregoing or for any Partnership Asset, to enforce or execute any checks, or other
instruments

14

 

or orders, to file any claims and to take any action in connection with
any of the foregoing (with all of the foregoing rights to be exercisable only upon
the occurrence and during the continuation of a Noticed Event of Default);

     (6) all other property hereafter delivered in substitution for or in addition
to any of the foregoing, all certificates and instruments representing or evidencing
such other property and all cash, securities, interest, dividends, rights and other
property at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;

     (v) all Financial Assets and Investment Property owned by such Pledgor from time to
time;

     (vi) all Security Entitlements owned by such Pledgor from time to time in any and all
of the foregoing; and

     (vii) all Proceeds of any and all of the foregoing.

; provided that, notwithstanding the foregoing, (1) the Collateral that secures the RAI
Senior Notes Obligations of a Specified RAI Senior Notes Pledgor shall be limited to Designated RAI
Senior Notes Collateral owned by such Specified RAI Senior Notes Pledgor, all of which Collateral
shall also ratably secure all other Applicable Obligations of such Specified RAI Senior Notes
Pledgor, and the Collateral Proceeds with respect to any item of Collateral owned by a Specified
RAI Senior Notes Pledgor that are to be applied to the RAI Senior Notes Obligations shall be
limited to Collateral Proceeds resulting from the sale, other disposition of or other realization
upon, and other moneys received in respect of, the Designated RAI Senior Notes Collateral of such
Specified RAI Senior Notes Pledgor, with such Collateral Proceeds to also be applied ratably to all
other Applicable Obligations of such Specified RAI Senior Notes Pledgor and (2) in the case of any
sale, assignment, transfer or grant of a security interest hereunder by a Restricted Pledgor only,
the term “Collateral” shall not include any Collateral (determined as provided herein without
regard to this clause (2)) of such Restricted Pledgor other than (x) Collateral of the type
described in clause (i) of Section 3.1 and (y) all other Collateral of the type which may be
perfected by the filling of a UCC-1 financing statement in any relevant jurisdiction.

          3.2. Procedures. (a) To the extent that any Pledgor at any time or from time to time
owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall
automatically (and without the taking of any action by the respective Pledgor) be pledged pursuant
to Section 3.1 of this Agreement and, in addition thereto, such Pledgor shall (to the extent
provided below) take the following actions for the benefit of the Pledgee and the other relevant
Secured Creditors as set forth below as promptly as practicable and, in any event, within 10
Business Days after it obtains such Collateral, provided that, notwithstanding the
foregoing, (i) in the case of Collateral consisting of an Uncertificated Security, Limited
Liability Company Interest or Partnership Interest of a Person which is not a Subsidiary of such
Pledgor and a security interest in which is to be perfected by taking an action specified in
sub-clause (ii) or
(iv)(2) below, such Pledgor shall have 30 days after it obtains such Collateral to take the
respective action required by said sub-clause, (ii) in the case of Collateral a security interest
in

15

 

which is to be perfected by taking an action specified in sub-clause (iii) below, such Pledgor
shall have 90 days after the Fifth Restatement Effective Date (or, if such Collateral is acquired
after the Fifth Restatement Effective Date, the date it obtains such Collateral) to take the
respective action required by said sub-clause, (iii) in the case of any Security, Stock, Limited
Liability Company Interest or Partnership Interest of an Excluded Foreign Entity, such Pledgor
owning the same shall only be required to take the respective action specified below on the date
such Excluded Foreign Entity ceases to qualify as an “Excluded Foreign Entity” in accordance with
the definition thereof and (iv) in the case of any Security, Stock, Limited Liability Company
Interest or Partnership Interest of any Domestic Subsidiary of the Borrower which is not (or is not
required pursuant to the terms of the Credit Agreement to be) a Credit Party owned by such Pledgor,
such Pledgor shall not be required (until such time, if any, as such Subsidiary shall become a
Credit Party) to take any of the actions specified in clause (i), (ii), (iii) or (iv) below, so
long as such Pledgor has taken all actions required by Section 3.2(b)(ii) below with respect to
such Collateral:

     (i) with respect to a Certificated Security (other than a Certificated Security
credited on the books of a Clearing Corporation), the respective Pledgor shall deliver such
Certificated Security to the Pledgee, indorsed to the Pledgee or indorsed in blank;

     (ii) with respect to an Uncertificated Security (other than an Uncertificated Security
credited on the books of a Clearing Corporation), the respective Pledgor shall cause the
issuer of such Uncertificated Security (or, in the case of an issuer that is not a
Subsidiary of such Pledgor, will use reasonable efforts to cause such issuer) to duly
authorize and execute, and deliver to the Pledgee, an agreement for the benefit of the
Pledgee and the other relevant Secured Creditors substantially in the form of Annex F hereto
(appropriately completed to the reasonable satisfaction of the Pledgee and with such
modifications, if any, as shall be reasonably satisfactory to the Pledgee) pursuant to
which, subject to Section 5 hereof, such issuer agrees to comply with any and all
instructions originated by the Pledgee without further consent by the registered owner and
not to comply with instructions regarding such Uncertificated Security (and any Partnership
Interest and Limited Liability Company Interest issued by such issuer) originated by any
other Person other than a court of competent jurisdiction; provided that in the case
of an Uncertificated Security issued by a Person that is organized under the laws of a
jurisdiction other than the United States or any state thereof, such Pledgor shall enter
into a Foreign Pledge Agreement and comply with the requirements of Section 16(d) as if said
Person had been (but then ceased to be) an Excluded Foreign Entity,

     (iii) with respect to a Certificated Security, Uncertificated Security, Partnership
Interest or Limited Liability Company Interest credited on the books of a Clearing
Corporation (including a Federal Reserve Bank, Participants Trust Company or The Depository
Trust Company), the respective Pledgor shall promptly notify the Pledgee thereof and shall
promptly take (x) all actions required (i) to comply with the applicable rules of such
Clearing Corporation and (ii) to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 9-314(a) and (b), 9-106 and
8-106(d) of the UCC) and (y) such other actions as the Pledgee deems reasonably
necessary or desirable to effect the foregoing;

16

 

     (iv) with respect to a Partnership Interest or a Limited Liability Company Interest
(other than a Partnership Interest or Limited Liability Interest credited on the books of a
Clearing Corporation), (1) if such Partnership Interest or Limited Liability Company
Interest is represented by a certificate and is a Security for purposes of the UCC, the
procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or
Limited Liability Company Interest is not represented by a certificate or is not a Security
for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii) hereof;

     (v) with respect to any Note, delivery of such Note to the Pledgee, indorsed to the
Pledgee or indorsed in blank; and

     (vi) with respect to cash proceeds, (i) establishment by the Pledgee of a cash account
in the name of such Pledgor over which the Pledgee shall have exclusive and absolute control
and dominion (and no withdrawals or transfers may be made therefrom by any Person except
with the prior written consent of the Pledgee) and (ii) deposit of such cash in such cash
account.

          (b) In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each
Pledgor shall take the following additional actions with respect to the Collateral:

     (i) with respect to all Collateral of such Pledgor whereby or with respect to which the
Pledgee may obtain “control” thereof within the meaning of Section 8-106 of the UCC (or
under any provision of the UCC as same may be amended or supplemented from time to time, or
under the laws of any relevant State other than the State of New York), the respective
Pledgor shall take all actions as may be reasonably requested from time to time by the
Pledgee so that “control” of such Collateral is obtained and at all times held by the
Pledgee; and

     (ii) each Pledgor shall from time to time cause appropriate financing statements (on
Form UCC-1 or other appropriate form) under the Uniform Commercial Code as in effect in the
various relevant States, covering all Collateral hereunder (with the form of such financing
statements to be satisfactory to the Pledgee), to be filed in the relevant filing offices so
that at all times the Pledgee has a security interest in all Investment Property and other
Collateral which is perfected by the filing of such financing statements (in each case to
the maximum extent perfection by filing may be obtained under the laws of the relevant
States, including, without limitation, Section 9-312(a) of the UCC).

          3.3. Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase,
stock dividend or similar distribution or otherwise) any additional Collateral at any time or from
time to time after the date hereof, such Collateral shall automatically (and without any further
action being required to be taken) be subject to the pledge and security interests created pursuant
to Section 3.1 hereof and, furthermore, the respective Pledgor will promptly thereafter take (or
cause to be taken) all action with respect to such Collateral in accordance with the procedures set
forth in Section 3.2 hereof, and will promptly thereafter deliver to the Pledgee (i) a
certificate executed by a principal executive officer of such Pledgor describing such Collateral
and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the

17

 

relevant Secured Creditors entitled thereto) hereunder and (ii) supplements to Annexes A through E
hereto as are reasonably necessary to cause such annexes to be complete and accurate at such time,
provided that unless specifically requested by the Collateral Agent, such updated Annexes
shall not be required to include any after-acquired Securities pledged to the Pledgee pursuant to
the procedures set forth in Section 3.2(a)(iii). Notwithstanding the foregoing, no Pledgor shall
be required at any time to pledge hereunder any Stock which will result in more than 65% of the
total combined voting power of all classes of capital stock of any Foreign Corporation entitled to
vote being pledged hereunder.

          3.4. Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3
hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of
such Collateral.

          4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall have the right to
appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral,
which may be held (in the discretion of the Pledgee) in the name of the relevant Pledgor, endorsed
or assigned in blank or, following a Noticed Event of Default which is continuing, in favor of the
Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee.

          5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until a Noticed Event of
Default shall have occurred and be continuing, each Pledgor shall be entitled to exercise all
voting rights attaching to any and all Collateral owned by it, and to give consents, waivers or
ratifications in respect thereof; provided that no vote shall be cast or any consent,
waiver or ratification given or any action taken which would violate, result in breach of any
covenant contained in, or be inconsistent with, any of the terms of this Agreement, the Credit
Agreement, any other Credit Document, any New Senior Notes Document, any Refinancing Senior Notes
Document, any Secured Credit Agreement or any Secured Hedging Agreement (collectively, the
“Secured Debt Agreements”), or which would have the effect of impairing in any material
respect the value of the Collateral or any material part thereof or impairing the position or
interests of the Pledgee or any other Secured Creditor therein, provided however,
each Pledgor shall be permitted to amend and/or modify intercompany notes constituting Collateral
in the ordinary course of business and consistent with past practices. All such rights of a
Pledgor to vote and to give consents, waivers and ratifications shall cease in case a Noticed Event
of Default shall occur and be continuing and Section 7 hereof shall become applicable. As used
herein, a “Noticed Event of Default” shall mean (i) an Event of Default with respect to a
Credit Party under Section 9.05 of the Credit Agreement and (ii) any other Event of Default in
respect of which the Pledgee has given the Borrower notice that such Event of Default constitutes a
“Noticed Event of Default”.

          6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until a Noticed Event of Default shall have occurred and be continuing, all cash
dividends, distributions, cash Proceeds or other amounts payable in respect of the Collateral shall
be paid to the respective Pledgor; provided that all dividends or other amounts payable in
respect of the Collateral which are determined by the Pledgee, to represent in whole or in part an
extraordinary, liquidating or other distribution in return of

18

 

capital not permitted by the Credit
Agreement shall be paid, to the extent so determined to represent an extraordinary, liquidating or
other distribution in return of capital, to the Pledgee and retained by it as part of the
Collateral (unless such cash dividends are applied to repay the Obligations pursuant to Section 9
of this Agreement). The Pledgee shall also be entitled to receive directly, and to retain as part
of the Collateral:

     (i) all other or additional stock, notes, limited liability company interests,
partnership interests, instruments or other securities or property (other than cash) paid or
distributed by way of dividend or otherwise in respect of the Collateral;

     (ii) all other or additional stock, notes, limited liability company interests,
partnership interests, instruments or other securities or property (including cash) paid or
distributed in respect of the Collateral by way of stock-split, spin-off, split-up,
reclassification, combination of shares or similar rearrangement; and

     (iii) all other or additional stock, notes, limited liability company interests,
partnership interests, instruments or other securities or property (including cash) which
may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of
stock, conveyance of assets, liquidation or similar corporate, partnership or other
reorganization.

Nothing contained in this Section 6 shall limit or restrict in any way the Pledgee’s right to
receive proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. All
dividends, distributions or other payments which are received by the respective Pledgor contrary to
the provisions of this Section 6 or Section 7 shall be received in trust for the benefit of the
Pledgee and shall be forthwith paid over to the Pledgee as Collateral in the same form as so
received (with any necessary endorsement).

          7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. In case a Noticed Event of Default shall
have occurred and be continuing, the Pledgee shall be entitled to exercise all of the rights,
powers and remedies (whether vested in it by this Agreement or by any other Secured Debt Agreement
or by law) for the protection and enforcement of its rights in respect of the Collateral,
including, without limitation, all the rights and remedies of a secured party upon default under
the Uniform Commercial Code as in effect in any relevant jurisdiction, and the Pledgee shall be
entitled, without limitation, to exercise any or all of the following rights, which each Pledgor
hereby agrees to be commercially reasonable:

     (i) to receive all amounts payable in respect of the Collateral otherwise payable under
Section 6 to such Pledgor;

     (ii) to transfer all or any part of the Collateral into the Pledgee’s name or the name
of its nominee or nominees;

     (iii) to accelerate any Pledged Note which may be accelerated in accordance with its
terms, and take any other lawful action to collect upon any Pledged Note (including, without
limitation, to make any demand for payment thereon);

     (iv) to vote all or any part of the Collateral (in each case whether or not transferred
into the name of the Pledgee) and give all consents, waivers and ratifications in respect of
the Collateral and otherwise act with respect thereto as though it were the outright

19

 

owner
thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy
and attorney-in-fact of such Pledgor, with full power of substitution to do so);

     (v) at any time or from time to time to sell, assign and deliver, or grant options to
purchase, all or any part of the Collateral, or any interest therein, at any public or
private sale, without demand of performance or advertisement or to redeem or otherwise (all
of which are hereby waived by each Pledgor), for cash, on credit or for other property, for
immediate or future delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its reasonable discretion may determine, provided
that at least 10 days’ notice of the time and place of any such sale shall be given to such
Pledgor. The Pledgee shall not be obligated to make such sale of Collateral regardless of
whether any such notice of sale has theretofore been given. Each purchaser at any such sale
shall hold the property so sold absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives and releases to the fullest extent permitted by law
any right or equity of redemption with respect to the Collateral, whether before or after
sale hereunder, and all rights, if any, of marshalling the Collateral and any other security
for the Obligations or otherwise. At any such sale, unless prohibited by applicable law,
the Pledgee on behalf of all Secured Creditors (or certain of them) may bid for and purchase
all or any part of the Collateral so sold free from any such right or equity of redemption.
Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or
realize upon any or all of the Collateral or for any delay in so doing nor shall it be under
any obligation to take any action whatsoever with regard thereto; and

     (vi) to set-off any and all Collateral against any and all Obligations, and to withdraw
any and all cash or other Collateral from any and all Collateral Accounts and to apply such
cash and other Collateral to the payment of any and all Obligations.

          8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the Pledgee provided
for in this Agreement or any other Secured Debt Agreement, or now or hereafter existing at law or
in equity or by statute shall be cumulative and concurrent and shall be in addition to every other
such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other
Secured Creditor of any one or more of the rights, powers or remedies provided for in this
Agreement or any other Secured Debt Agreement or now or hereafter existing at law or in equity or
by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any
other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the
part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall
operate as a waiver thereof. Unless otherwise required by the Credit Documents, no notice to
or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in
similar other circumstances or constitute a waiver of any of the rights of the Pledgee or any other
Secured Creditor to any other further action in any circumstances without demand or notice. By
accepting the benefits of this Agreement, the Secured Creditors expressly acknowledge and agree
that (x) this Agreement may be enforced only by the action of the Pledgee acting upon the
instructions of the Required Lenders or, if the CA Termination Date
has occurred, the holders of a
majority of the outstanding principal amount of all remaining Obligations, provided that if
prior to the CA Termination Date

20

 

a payment default with respect to at least $300,000,000 principal
amount in the aggregate of New Senior Notes and/or Refinancing Senior Notes has continued for at
least 180 days (and such defaulted payment has not been received pursuant to a drawing under any
letter of credit), the holders of a majority of the outstanding principal amount of the
Indebtedness subject to such payment default or defaults can direct the Pledgee to commence and
continue enforcement of the Liens created hereunder, which the Pledgee shall comply with subject to
receiving any indemnity which it reasonably requests, provided further that the Pledgee
shall thereafter comply only with the directions of the Required Lenders as to how to carry out
such enforcement so long as such directions are not adverse to the aforesaid directions of the
holders of Indebtedness subject to such payment default or defaults and (y) no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to
realize upon the security to be granted hereby, it being understood and agreed that such rights and
remedies shall be exercised exclusively by the Pledgee for the benefit of the Secured Creditors as
their interests may appear upon the terms of this Agreement.

          9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee upon any sale,
other disposition of or other realization upon any Collateral pursuant to the terms of this
Agreement, together with all other moneys received by the Pledgee hereunder (collectively, the
“Collateral Proceeds”), shall be applied (subject to the payment rules set forth more
specifically in Section 9(c) below) as follows:

     (i) first, to the payment of all Obligations owing to the Pledgee of the type
described in clauses (vi), (vii) and (viii) of Section 1 herein;

     (ii) second, to the extent proceeds of the sale, other disposition of or other
realization upon any item of Collateral remain after the application pursuant to preceding
clause (i), an amount equal to the outstanding Applicable Obligations secured by such item
of Collateral shall be paid to the Secured Creditors as their interests may appear, with (x)
each Secured Creditor receiving an amount equal to its outstanding Applicable Obligations
secured by such item of Collateral or, if the proceeds are insufficient to pay in full all
such Applicable Obligations, its Pro Rata Share of the amount so remaining
to be distributed and (y) in the case of the Credit Document Obligations, the New Senior
Notes Obligations and the Refinancing Senior Notes Obligations included in such Applicable
Obligations, any such amount to be applied (1) first to the payment of interest in
respect of the unpaid principal amount of Loans, New Senior Notes or Refinancing Senior
Notes, as the case may be, (2) second to the payment of principal of Loans, New
Senior Notes or Refinancing Senior Notes, as the case may be and (3) third to the
other
Credit Document Obligations, New Senior Notes Obligations and Refinancing Senior Notes
Obligations, as the case may be; and

     (iii) third, to the extent proceeds remain after the application pursuant to
the preceding clauses (i) and (ii), to the relevant Pledgor or, to the extent directed by
such Pledgor or a court of competent jurisdiction, to whomever may be lawfully entitled to
receive such surplus.

          (b) For purposes of this Agreement, “Pro Rata Share” shall mean when
calculating a Secured Creditor’s portion of any distribution or amount pursuant to clause (a)

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above, the amount (expressed as a percentage) equal to a fraction the numerator of which is the
then outstanding amount of the relevant Applicable Obligations secured by the relevant item of
Collateral owed such Secured Creditor and the denominator of which is the then outstanding amount
of all Applicable Obligations secured by the relevant item of Collateral.

          (c) All payments required to be made to (i) the Lender Creditors hereunder shall be made to
the Administrative Agent for the account of the respective Lender Creditors, (ii) the Credit Card
Issuers hereunder shall be made to the Credit Card Issuer(s) under the applicable Secured Credit
Card Agreement, (iii) the Hedging Creditors hereunder shall be made to the paying agent under the
applicable Secured Hedging Agreement or, in the case of Secured Hedging Agreements without a paying
agent, directly to the applicable Hedging Creditors, (iv) the New Senior Notes Creditors hereunder
shall be made to the New Senior Notes Trustee for the account of the respective New Senior Notes
Creditors and (v) the Refinancing Senior Notes Creditors hereunder shall be made to the Refinancing
Senior Notes Trustee for the account of the respective Refinancing Senior Notes Creditors.

          (d) For purposes of applying payments received in accordance with this Section 9, the Pledgee
shall be entitled to rely upon (i) the Administrative Agent for a determination of the outstanding
Credit Document Obligations, (ii) any Credit Card Issuer for a determination of the outstanding
Credit Card Obligations owed to such Credit Card Issuer, (iii) any Hedging Creditor for a
determination of the outstanding Hedging Obligations owed to such Hedging Creditor, (iv) the New
Senior Notes Trustee for a determination of the outstanding New Senior Notes Obligations and (v)
the Refinancing Senior Notes Trustee for a determination of the outstanding Refinancing Senior
Notes Obligations. Unless it has actual knowledge (including by way of written notice from a
Secured Creditor) to the contrary, the Administrative Agent under the Credit Agreement, in
furnishing information pursuant to the preceding sentence, and the Pledgee, in acting hereunder,
shall be entitled to assume that no Credit Document Obligations other than principal, interest and
regularly accruing fees are owing to any Lender Creditor.

          (e) It is understood and agreed that each Pledgor shall remain liable to the extent of any
deficiency between (x) the amount of the Obligations for which it is responsible directly or as a
Guarantor that are satisfied with proceeds of the Collateral and (y) the aggregate outstanding
amount of such Obligations.

          10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of
sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Pledgee or such officer or be
answerable in any way for the misapplication or nonapplication thereof.

          11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify and hold
harmless the Pledgee and each other Secured Creditor and their respective successors, assigns,
employees, agents and affiliates (individually, an “Indemnitee,” and collectively the
“Indemnitees”) from and against any and all claims, demands, losses, judgments and
liabilities (including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse each

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Indemnitee for all reasonable costs and expenses, including reasonable attorneys’
fees, in each case growing out of or resulting from this Agreement or the exercise by any
Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement
(but excluding any claims, demands, losses, judgments and liabilities or expenses to the extent
incurred by reason of gross negligence or willful misconduct of such Indemnitee (as determined by a
court of competent jurisdiction in a final and non-appealable decision)). In no event shall the
Pledgee be liable, in the absence of gross negligence or willful misconduct on its part, for any
matter or thing in connection with this Agreement other than to account for moneys or other
property actually received by it in accordance with the terms hereof. If and to the extent that
the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such
Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.

          12. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed to make the Pledgee or
any other Secured Creditor liable as a general partner or limited partner of any Pledged
Partnership or a member of any Pledged LLC and the Pledgee or any other Secured Creditor by virtue
of this Agreement or otherwise (except as referred to in the following sentence) shall not have any
of the duties, obligations or liabilities of a general partner or limited partner of any Pledged
Partnership or a member of any Pledged LLC. The parties hereto expressly agree that, unless the
Pledgee shall become the absolute owner of the respective Pledged Partnership Interest, Pledged
Limited Liability Company Interest or Security pursuant hereto, this Agreement shall not be
construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor
and/or any Pledgor.

          (b) Except as provided in the last sentence of paragraph (a) of this Section, the Pledgee, by
accepting this Agreement, did not intend to become a general partner or limited partner of any
Pledged Partnership or a member of any Pledged LLC or otherwise be deemed to be a co-venturer with
respect to any Pledgor, any Pledged Partnership or any Pledged LLC., either before or after an
Event of Default shall have occurred. The Pledgee shall have only those powers set forth herein
and shall assume none of the duties, obligations or liabilities of a general
partner or limited partner of any Pledged Partnership or a member of any Pledged LLC or of any
Pledgor.

          (c) Neither the Pledgee nor any other Secured Creditor shall be obligated to perform or
discharge any obligation of any Pledgor as a result of the collateral assignment hereby effected.

          (d) The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges
and authority so created, shall not at any time or in any event obligate the Pledgee to appear in
or defend any action or proceeding relating to the Collateral to which it is not a party, or to
take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or
discharge any obligation, duty or liability under the Collateral.

          13. FURTHER ASSURANCES. (a) Each Pledgor agrees that it will join with the Pledgee
in executing and, at such Pledgor’s own expense, file and refile under the Uniform Commercial Code
such financing statements, continuation statements and other documents in such offices as the
Pledgee may reasonably deem necessary or appropriate and wherever

23

 

required or permitted by law in
order to perfect and preserve the Pledgee’s security interest in the Collateral hereunder and
hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of such Pledgor where permitted by law, and
agrees to do such further acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may reasonably require or
reasonably deem advisable to carry into effect the purposes of this Agreement or to further assure
and confirm unto the Pledgee its rights, powers and remedies hereunder or thereunder.

          (b) Each Pledgor hereby appoints the Pledgee, such Pledgor’s attorney-in-fact, with full
authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from
time to time after the occurrence and during the continuance of an Event of Default, in the
Pledgee’s reasonable discretion to take any action and to execute any instrument which the Pledgee
may reasonably deem necessary or advisable to accomplish the purposes of this Agreement.

          14. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in accordance with this
Agreement all items of the Collateral at any time received under this Agreement. It is expressly
understood and agreed that the obligations of the Pledgee as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this Agreement, are only
those expressly set forth in this Agreement. The Pledgee shall act hereunder on the terms and
conditions set forth herein and in Annex M to the Security Agreement, the terms of which shall be
deemed incorporated herein by reference as fully as if same were set forth herein in their entirety
(for such purpose, treating each reference to the “Security Agreement” as a reference to this
Agreement, each reference to the “Collateral Agent” as a reference to the Pledgee, each reference
to an “Assignor” as a reference to a “Pledgor” and each reference to a “Secured Creditor” and a
“Secured Debt
Agreement” as a reference to a “Secured Creditor” or a “Secured Debt Agreement”, as the case
may be, as defined herein).

          15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise dispose of, grant
any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any
interest therein if prohibited by the terms of this Agreement or any other Secured Debt Agreement.

          16. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS. (a) Each Pledgor represents,
warrants and covenants that:

     (i) it is the legal, record and beneficial owner of, and has good and marketable title
to, all Collateral consisting of one or more Securities pledged by it hereunder, subject to
no pledge, lien, mortgage, hypothecation, security interest, charge, option or other
encumbrance whatsoever, except the liens and security interests created by this Agreement
and Permitted Liens;

     (ii) it has full power, authority and legal right to pledge all the Collateral pledged
by it pursuant to this Agreement without the consent of any other Person;

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     (iii) this Agreement has been duly authorized, executed and delivered by such Pledgor
and constitutes a legal, valid and binding obligation of such Pledgor enforceable in
accordance with its terms, except to the extent that the enforceability hereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors’ rights and by equitable principles (regardless of whether
enforcement is sought in equity or law);

     (iv) except to the extent already made or obtained, no consent of any other party
(including, without limitation, any stockholder, member, limited or general partner or
creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by such Pledgor in
connection with (a) the execution, delivery or performance of this Agreement, (b) the
validity or enforceability of this Agreement, (c) the perfection or enforceability of the
Pledgee’s security interest in the Collateral (other than with respect to the Equity
Interests of an Excluded Foreign Entity) or (d) except for compliance with or as may be
required by applicable securities laws, the exercise by the Pledgee of any of its rights or
remedies provided herein;

     (v) neither the execution, delivery or performance of this Agreement or any other
Secured Debt Agreement to which it is a party violates (a) any material provision of any
applicable law or regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or domestic or foreign governmental authority, (b) the certificate of
incorporation, certificate of formation, certificate of partnership, partnership agreement,
limited liability company agreement (or equivalent organizational documents) or by-laws,
as the case may be, of such Pledgor or of any securities issued by such Pledgor or any
of its Subsidiaries, or (c) any indenture, mortgage, lease, deed of trust, credit agreement,
loan agreement, agreement or other instrument to which such Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon such Pledgor or any of its
Subsidiaries or upon any of their respective assets and will not result in the creation or
imposition of any lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement;

     (vi) all the Collateral consisting of Securities, Pledged Limited Liability Company
Interests and Pledged Partnership Interests have been duly and validly issued, are fully
paid and non-assessable and are subject to no options to purchase or similar rights;

     (vii) to Pledgor’s knowledge, each of the Pledged Notes constitute, or, when executed
by the obligor thereof, will constitute, the legal, valid and binding obligation of such
obligor, enforceable in accordance with its terms except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws generally affecting creditors’ rights and by equitable principles
(regardless of whether enforcement is sought in equity or law);

25

 

     (viii) the pledge, assignment and delivery to the Pledgee of the Collateral consisting
of Certificated Securities (other than the Certificated Securities (x) of the Excluded
Foreign Entities and (y) required to be pledged pursuant to the procedures set forth in
Section 3.2(a)(iii)) and Pledged Notes pursuant to this Agreement, creates a valid and
perfected first security interest in such Collateral and the proceeds thereof, subject to no
prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien
or encumbrance on the property or assets of such Pledgor which would include the Securities;

     (ix) it is not in default in the payment of any portion of any mandatory capital
contribution, if any, required to be made under any partnership agreement or limited
liability company agreement to which such Pledgor is a party, and such Pledgor is not in
violation of any other material provisions of any partnership agreement or limited liability
company agreement to which such Pledgor is a party, or otherwise in default or violation
thereunder; no Partnership Interest or Limited Liability Company Interest is subject to any
defense, offset or counterclaim, nor have any of the foregoing been asserted or alleged
against such Pledgor by any Person with respect thereto;

     (x) it shall not withdraw as a partner of any Pledged Partnership or member of any
Pledged LLC, or file or pursue or take any action which may, directly or indirectly, cause a
dissolution or liquidation of or with respect to any Pledged Entity or seek a partition of
any property of any Pledged Entity, except as permitted by the Credit Agreement;

     (xi) the Pledged Partnership Interests or Pledged Limited Liability Company Interests
of such Pledgor, as the case may be, constitute, and will at all times hereafter
continue to constitute, in the aggregate, all of the partnership interests or
membership interests, as the case may be, of each Pledged Entity of such Pledgor and no
Pledged Entity shall create any options or rights or other agreements to sell or otherwise
transfer, or sell or otherwise transfer, any Partnership Interests or Limited Liability
Company Interests;

     (xii) each partnership agreement and limited liability company agreement is the legal,
valid and binding obligation of the parties thereto, enforceable in accordance with its
terms and, together with this Agreement, contains the entire agreement between the parties
thereto relating to the subject matter thereof; and

     (xiii) “control” (as defined in Section 8-106 of the UCC) has been obtained by the
Pledgee over all Collateral consisting of Securities (including Notes which are Securities)
with respect to which such “control” may be obtained pursuant to Section 8-106 of the UCC,
in each such case to the extent required by the terms of this Agreement.

          (b) Each Pledgor covenants and agrees that it will defend the Pledgee’s right, title and
security interest in and to the Securities and the proceeds thereof against the claims and demands
of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to
and right to pledge any other property at any time hereafter pledged to the Pledgee as

26

 

Collateral
hereunder and will likewise defend the right thereto and security interest therein of the Pledgee
and the other Secured Creditors.

          (c) Each Pledgor covenants and agrees that it will take no action which would violate or be
inconsistent with any of the terms of any Secured Debt Agreement, or which would have the effect of
impairing the position or interests of the Pledgee or any other Secured Creditor under any Secured
Debt Agreement except as permitted by the Credit Agreement.

          (d) Any Pledgor which owns an equity interest in an Excluded Foreign Entity covenants and
agrees that on the date on which such entity ceases to qualify as an “Excluded Foreign Entity” in
accordance with the definition thereof, (i) such Pledgor shall have duly authorized, executed and
delivered to the Pledgee a pledge agreement, in form and substance satisfactory to the Pledgee,
governed by the laws of the jurisdiction of organization of such Excluded Foreign Entity and
covering (subject to the pledge limitations in subclause (ii) of the definition of the term
“Stock”) the equity interests of such Excluded Foreign Entity owned by such Pledgor (as amended,
restated, modified and/or supplemented from time to time in accordance with the terms thereof and
of the Credit Agreement, each such pledge agreement, a “Foreign Pledge Agreement”), (ii)
such Foreign Pledge Agreement shall be in full force and effect and shall have been duly recorded
or filed in such manner and in such places as required by the law of the jurisdiction governing
such Foreign Pledge Agreement to establish, perfect, preserve and protect the pledge in favor of
the Collateral Agent, (iii) all taxes, fees and other charges payable in connection with the such
Foreign Pledge Agreement (including the recordation thereof) shall have been paid in full and (iv)
the Pledgee shall have received such other evidence that all actions necessary or, in the opinion
of the Pledgee, desirable, to perfect and/or render enforceable the security interest purported to
be created by such Foreign Pledge Agreement have been taken (including, without limitation, the
delivery of an opinion from local
counsel acceptable to the Pledgee in form, scope and substance reasonably satisfactory to the
Pledgee).

          (e) Each Pledgor represents and warrants as of the date of each Credit Event under the Credit
Agreement, that the fair market value of the Margin Stock held by the Pledgors as of the date of
such Credit Event does not exceed $50,000,000.

          17. PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this
Agreement shall be absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by,
any circumstance or occurrence whatsoever, including, without limitation:

     (i) any renewal, extension, amendment or modification of, or addition or supplement to
or deletion from any of the Secured Debt Agreements, or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof;

     (ii) any waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument or this Agreement;

     (iii) any furnishing of any additional security to the Pledgee or its assignee or any
acceptance thereof or any release of any security by the Pledgee or its assignee;

27

 

     (iv) any limitation on any party’s liability or obligations under any such instrument
or agreement or any invalidity or unenforceability, in whole or in part, of any such
instrument or agreement or any term thereof; or

     (v) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to such Pledgor or any Subsidiary of such
Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or
by any court, in any such proceeding, whether or not such Pledgor shall have notice or
knowledge of any of the foregoing.

          18. TERMINATION; RELEASE. (a) After the Termination Date (as defined below), this
Agreement shall terminate (provided that all indemnities set forth herein including,
without limitation, in Section 11 hereof shall survive any such termination) and the Pledgee, at
the request and expense of the respective Pledgor, will execute and deliver to such Pledgor a
proper instrument or instruments acknowledging the satisfaction and termination of this Agreement
as provided above, and will duly assign, transfer and deliver to such Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the possession of the
Pledgee and as has not theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any moneys at the time held by the Pledgee hereunder. As used in this
Agreement, (i) “CA Termination Date” shall mean the date upon which the Total Commitment
has been terminated, no Letter of Credit or Note under the Credit Agreement is outstanding and all
other Credit Document Obligations have been paid in full in cash (other than arising from
indemnities
for which no request for payment has been made) and (ii) “Termination Date” shall mean
the date upon which (x) the CA Termination Date shall have occurred and (y) if (but only if) a
Notified Non-Credit Agreement Event of Default shall have occurred and be continuing on the CA
Termination Date (and after giving effect thereto), either (I) such Notified Non-Credit Agreement
Event of Default shall have been cured or waived by the requisite holders of the relevant
Obligations subject to such Notified Non-Credit Agreement Event of Default or (II) all Secured
Credit Card Agreements and Secured Hedging Agreements (if any) giving rise to a Notified Non-Credit
Agreement Event of Default shall have been terminated and all Obligations subject to such Notified
Non-Credit Agreement Event of Default shall have been paid in full (other than arising from
indemnities for which no request for payment has been made).

          (b) So long as no Notified Non-Credit Agreement Event of Default has occurred and is
continuing, in the event that (x) prior to the CA Termination Date (i) any part of the Collateral
is sold or otherwise disposed of in connection with a sale or other disposition permitted by
Section 8.02 of the Credit Agreement (it being agreed for such purposes that a release will be
deemed “permitted by Section 8.02 of the Credit Agreement” if the proposed transaction constitutes
an exception to Section 8.02 of the Credit Agreement) or (ii) all or any part of the Collateral is
released at the direction of the Required Lenders (or all the Lenders if required by Section 12.12
of the Credit Agreement), and the proceeds of such sale or disposition or from such release (if
any) are applied in accordance with the terms of the Credit Agreement to the extent required to be
so applied or (y) on and after the CA Termination Date, any part of the Collateral is sold or
otherwise disposed of without violating the New Senior Notes Documents, the Refinancing Senior
Notes Documents, the Secured Credit Card Agreements and the Secured Hedging Agreements, the
Pledgee, at the request and expense of the respective Pledgor will

28

 

release such Collateral from
this Agreement, duly assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has been) so sold or
released and as may be in possession of the Pledgee and has not theretofore been released pursuant
to this Agreement (it being understood and agreed that upon the release of all or any portion of
the Collateral by the Collateral Agent at the direction of the Lenders as provided above, the Lien
on the Collateral in favor of the Collateral Agent for the benefit of the Credit Card Issuer, the
Hedging Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors shall
automatically be released).

          (c) In addition to the foregoing, all Collateral shall be automatically released (subject to
reinstatement upon the occurrence of a new Trigger Event, with each date of such reinstatement, a
“Subsequent Effective Date”) in accordance with Section 7.10(i) of the Credit Agreement.

          (d) At any time that the relevant Pledgor desires that the Pledgee take any action to give
effect to any release of Collateral pursuant to the foregoing Section 18(a), (b) or (c), it shall
deliver to the Pledgee a certificate signed by an authorized officer describing the Collateral to
be released and certifying its entitlement to a release pursuant to the applicable provisions of
Sections 18(a), (b) or (c) and in such case the Pledgee, at the request and expense of such
Pledgor, will execute such documents as required to duly release such Collateral and to assign,
transfer and deliver to such Pledgor or its designee (without recourse and without any
representation or warranty) such of the Collateral as is then being released and as may be in the
possession of the Pledgee. The Pledgee shall have no liability whatsoever to any other Secured
Creditor as the result of any release of Collateral by it in accordance with (or which the
Pledgee in good faith believes to be in accordance with) this Section 18. Upon any release of
Collateral pursuant to Section 18(a), (b) or (c), so long as no Noticed Event of Default is then in
existence, none of the Secured Creditors shall have any continuing right or interest in such
Collateral, or the proceeds thereof (subject to reinstatement rights upon the occurrence of a new
Trigger Event in the case of a release pursuant to Section 18(c)).

          19. NOTICES, ETC. All notices and other communications provided for hereunder shall
be in writing (including telegraphic, telex, facsimile transmission or cable communication) and
mailed, telegraphed, telexed, telecopied, cabled or delivered (including by way of overnight
courier):

          (i) if to any Pledgor, at its address set forth opposite its signature below;

          (ii) if to the Pledgee, at:

JPMorgan Chase Bank, N.A.

4 New York Plaza, 4th Floor

New York, New York 10004

Attention: Raju Nanoo

Tel: 212-623-7537

Fax: 212-623-1310

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     (iii) if to any Lender (other than the Pledgee), at such address as such Lender shall
have specified in the Credit Agreement;

     (iv) if to any Credit Card Issuer, at such address as such Credit Card Issuer shall
have specified in writing to the Pledgors and the Pledgee;

     (v) if to any Hedging Creditor, at such address as such Hedging Creditor shall have
specified in writing to the Pledgors and the Pledgee;

     (vi) if to any New Senior Notes Creditor, at such address of the New Senior Notes
Trustee as the New Senior Notes Trustee shall have specified in writing to the Pledgors and
the Pledgee;

     (vii) if to any Refinancing Senior Notes Creditor, at such address of the Refinancing
Senior Notes Trustee as the Refinancing Senior Notes Trustee shall have specified in writing
to the Pledgors and the Pledgee;

or at such other address as shall have been furnished in writing by any Person described above to
the party required to give notice hereunder. Except as otherwise expressly provided herein, all
such notices and communications shall be deemed to have been duly given or made when received.

          20. WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be changed, waived, modified or
varied in any manner whatsoever unless in writing duly signed by the Pledgee (with the consent of
(x) if prior to the CA Termination Date, the Required Lenders or, to the extent required by Section
12.12 of the Credit Agreement, all of the Lenders and (y) if on and after the CA Termination Date,
the holders of at least a majority of the outstanding principal amount of the Obligations remaining
outstanding), and each Pledgor affected thereby (it being understood that the addition or release
of any Pledgor hereunder shall not constitute a change, waiver, discharge or variance affecting any
Pledgor other than the Borrower and the Pledgor so added or released), provided that any
change, waiver, modification or variance affecting the rights and benefits of a single Class of
Secured Creditors (and not all Secured Creditors in a like or similar manner) shall require the
written consent of the Requisite Creditors of such Class of Secured Creditors; provided,
however, that technical modifications may be made to this Agreement without the consent of
a given Class of Secured Creditors affected thereby if such modifications are intended to conform
the Collateral pledge requirements of this Agreement with the pledge requirements of the relevant
Secured Debt Agreements to which such Class of Secured Creditors is a party. For the purpose of
this Agreement, the term “Class” shall mean each class of Secured Creditors, i.e.,
whether (1) the Lender Creditors as holders of the Credit Document Obligations, (2) the Credit Card
Issuers as holders of the Credit Card Obligations, (3) the Hedging Creditors as holders of the
Hedging Obligations, (4) the New Senior Notes Creditors as holders of the New Senior Notes
Obligations or (5) the Refinancing Senior Notes Creditors as holders of the Refinancing Senior
Notes Obligations. For the purpose of this Agreement, the term “Requisite Creditors” of
any Class shall mean each of (1) with respect to each of the Credit Document Obligations, the
Required Lenders, (2) with respect to the Credit Card Obligations, the holders of at least a
majority of all Credit Card Obligations outstanding from time to time, (3) with respect to the
Hedging

30

 

Obligations, the holders of at least a majority of all Hedging Obligations outstanding from
time to time, (4) with respect to the New Senior Notes Obligations, the holders of at least a
majority of the outstanding principal amount of the New Senior Notes and (5) with respect to the
Refinancing Senior Notes Obligations, the holders of at least a majority of the outstanding
principal amount of the Refinancing Senior Notes.

          21. MISCELLANEOUS. This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect, subject to release and/or termination as
set forth in Section 18, (ii) be binding upon each Pledgor, its successors and assigns, and (iii)
inure, together with the rights and remedies of the Pledgee hereunder, to the benefit of the
Pledgee, the other Secured Creditors and their respective successors, transferees and assigns. This
Agreement shall be construed and enforced in accordance with and governed by the law of the State
of New York. The headings of the several sections and subsections in this Agreement are for
purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. In the event that any provision of this Agreement shall
prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other
provisions of this Agreement which shall remain binding on all parties hereto.

          22. WAIVER OF JURY TRIAL. Each party hereto irrevocably waives all right to a trial by jury in any action, proceeding
or counterclaim arising out of or relating to this Agreement or the transactions contemplated
hereby.

          23. ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of the
Borrower that is required to become a party to this Agreement after the date hereof pursuant to the
requirements of the Credit Agreement shall become a Pledgor hereunder by (x) executing a
counterpart hereof and/or an assumption agreement in form and substance satisfactory to the
Collateral Agent, (y) delivering supplements to Annexes A through E hereto, as are necessary to
cause such Annexes to be complete and accurate with respect to such additional Pledgor on such date
and (z) taking all actions as specified in this Agreement, in each case with all documents required
above to be delivered to the Collateral Agent and with all documents and action required above to
be taken to the reasonable satisfaction of the Collateral Agent.

          24. NO THIRD PARTY BENEFICIARIES. This Agreement is entered into solely for the
benefit of the parties hereto and their respective successors and assigns and for the benefit of
the Secured Creditors from time to time and their respective successors and assigns and, except for
the Secured Creditors and their successors and assigns, there shall be no third party beneficiaries
hereof, nor shall any Person other than the parties hereto and their respective successors and
assigns, and the Secured Creditors and their respective successors and assigns, be entitled to
enforce the provisions hereof or have any claims against any party hereto (or any Secured Creditor)
or their successors and assigns arising from, or under, this Agreement.

          25. [RESERVED].

31

 

          26. AMENDMENT AND RESTATEMENT. Each of the Collateral Agent and each of the Pledgors
hereby acknowledges and agrees that from and after the Fifth Restatement Effective Date, this
Agreement amends, restates and supersedes the Second Amended and Restated Pledge Agreement in its
entirety.

* * *

32

 

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

	 	 	 	 	 
	 	REYNOLDS AMERICAN INC.,

     as a Pledgor

 	 
	 	By:  	                 /s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Senior Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	R.J. REYNOLDS TOBACCO HOLDINGS, INC., 

     as a Pledgor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Senior Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	R. J. REYNOLDS TOBACCO COMPANY, 

     as a Pledgor

 	 
	 	By:  	                       /s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Treasurer 	 
	 

	 	 	 	 	 
	 	RJR ACQUISITION CORP., as a Pledgor

 	 
	 	By:  	              /s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Assistant Treasurer 	 
	 

	 	 	 	 	 
	 	GMB, INC., as a Pledgor

 	 
	 	By:  	                       /s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Treasurer 	 
	 

	 	 	 	 	 
	 	FHS, INC., as a Pledgor

 	 
	 	By:  	                      /s/ Vernon A. Stewart
 	 
	 	 	Name:  	Vernon A. Stewart 	 
	 	 	Title:  	Vice President 	 
	 

Signture Page to Pledge Agreement

 

 

	 	 	 	 	 
	 	R. J. REYNOLDS TOBACCO CO.,

     as a Pledgor

 	 
	 	By:  	                 /s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	CONWOOD COMPANY, LLC,

     as a Pledgor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	CONWOOD SALES CO., LLC,

     as a Pledgor

 	 
	 	By:  	                 /s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	ROSSWIL LLC, as a Pledgor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	CONWOOD HOLDINGS, INC.,

     as a Pledgor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	SCOTT TOBACCO LLC,

     as a Pledgor,

 	 
	 	By:  	                /s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

Signture Page to Pledge Agreement

 

 

	 	 	 	 	 
	 	RJR PACKAGING, LLC,

     as a Pledgor,

 	 
	 	By:  	                /s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	R. J. REYNOLDS GLOBAL PRODUCTS, INC.,

     as a Pledgor,

 	 
	 	By:  	                /s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	SANTA FE NATURAL TOBACCO COMPANY, INC., 

     as a Pledgor,

 	 
	 	By:  	/s/ Richard M. Sanders
 	 
	 	 	Name:  	Richard M. Sanders 	 
	 	 	Title:  	President and CEO 	 
	 

	 	 	 	 	 
	 	LANE, LIMITED, as a Pledgor,

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Assistant Treasurer 	 
	 

Signture Page to Pledge Agreement

 

 

	 	 	 	 	 
	Acknowledged And Agreed:	 	 
	 
	 	 	 	 
	JPMORGAN CHASE BANK, N.A.,	 	 
	     as Collateral Agent and Pledgee	 	 
	 
	 	 	 	 
	By:

	 	/s/ Thomas T. Hou
 

Name: Thomas T. Hou
	 	 
	 

	 	Title: Executive Director	 	 

Signture Page to Pledge AgreementExhibit 10.3

 

Exhibit 10.3

 

THIRD AMENDED AND RESTATED SECURITY AGREEMENT

among

REYNOLDS AMERICAN INC.,

R.J. REYNOLDS TOBACCO HOLDINGS, INC.,

VARIOUS SUBSIDIARIES OF

REYNOLDS AMERICAN INC.

and

JPMORGAN CHASE BANK, N.A.,

as Collateral Agent

Dated as of June 28, 2007

 

 

 

THIRD AMENDED AND RESTATED SECURITY AGREEMENT

          SECURITY AGREEMENT, dated as of July 15, 2003, as amended and restated as of July 30, 2004, as
further amended and restated as of May 31, 2006, and as further amended and restated as of June 28,
2007 (as so amended and restated and as the same may be further amended, restated, supplemented
and/or otherwise modified from time to time, this “Agreement”), among each of the
undersigned (together with any other entity that becomes a party hereto pursuant to Section 10.12
hereof, each, an “Assignor” and, collectively, the “Assignors”) and JPMORGAN CHASE
BANK, N.A., as Collateral Agent (in such capacity, together with any successor collateral agent,
the “Collateral Agent”) for the Secured Creditors (as defined below). Capitalized terms
used herein shall have the meaning specified in Article IX herein or, if not defined therein, as
specified in the Credit Agreement referred to below.

W I T N E S S E T H:

          WHEREAS, Reynolds American Inc. (the “Borrower”), the various lending institutions
from time to time party thereto (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as
Administrative Agent (the “Administrative Agent”), have entered into a Credit Agreement,
dated as of May 7, 1999, as amended and restated as of November 17, 2000, as further amended and
restated as of May 10, 2002, as further amended and restated as of July 30, 2004, as further
amended and restated as of May 31, 2006, and as further amended and restated as of June 28, 2007,
providing for the making of Loans to the Borrower and the issuance of, and participation in,
Letters of Credit for the account of the Borrower, all as contemplated therein (with (i) the
Lenders, the Swingline Lenders, each Letter of Credit Issuer, the Administrative Agent, the other
Agents, the Pledgee (as defined in the Pledge Agreement) and the Collateral Agent being herein
called the “Lender Creditors” and (ii) the term “Credit Agreement” as used herein
to mean the Credit Agreement described above in this paragraph, as the same may be further amended,
modified, extended, renewed, replaced, restated, supplemented and/or refinanced from time to time,
and including any agreement extending the maturity of, or refinancing or restructuring (including,
but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase
in the amount borrowed) all or any portion of, the indebtedness under such agreement or any
successor agreement, whether or not with the same agent, trustee, representative, lenders or
holders; provided that, with respect to any agreement providing for the refinancing or
replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or
as part of, the Credit Agreement hereunder if (x) either (A) all obligations under the Credit
Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or
replacement, and all commitments and letters of credit issued pursuant to the refinanced or
replaced Credit Agreement shall have terminated in accordance with their terms or (B) the Required
Lenders shall have consented in writing to the refinancing or replacement indebtedness being
treated as indebtedness pursuant to the Credit Agreement, and (y) a notice to the effect that the
refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall
be delivered by the Borrower to the Collateral Agent);

 

 

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered
into, and/or may in the future from time to time enter into, one or more agreements or arrangements
with JPMCB or any of its affiliates (even if JPMCB ceases to be a Lender under the Credit Agreement
for any reason (JPMCB and any such affiliate and their respective successors and assigns, each, a
“Credit Card Issuer”)), providing for credit card loans to be made available to certain
employees of the Borrower and/or one or more of its Subsidiaries (each such agreement or
arrangement with a Credit Card Issuer, a “Secured Credit Card Agreement”);

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered
into, and/or may in the future from time to time enter into, one or more (i) interest rate
protection agreements (including, without limitation, interest rate swaps, caps, floors, collars
and similar agreements), and/or (ii) foreign exchange contracts, currency swap agreements,
commodity agreements or other similar agreements or arrangements designed to protect against the
fluctuations in currency or commodity values (each such agreement or arrangement with a Hedging
Creditor (as hereinafter defined) a “Secured Hedging Agreement”), with any Lender, or any
affiliate thereof or a syndicate of financial institutions organized by a Lender or an affiliate of
a Lender (even if any such Lender ceases to be a Lender under the Credit Agreement for any reason)
(any such Lender, affiliate or other such financial institution that participates therein and in
each case their subsequent successors and assigns, collectively, the “Hedging Creditors”,
and together with the Lender Creditors and each Credit Card Issuer, the “Lender Secured
Creditors”);

          WHEREAS, the Borrower and the New Senior Notes Trustee, on behalf of the holders of the New
Senior Notes, have entered into the New Senior Notes Indenture, providing for the issuance from
time to time of New Senior Notes by the Borrower;

          WHEREAS, the Borrower and the Refinancing Senior Notes Trustee, on behalf of the holders of
the Refinancing Senior Notes, may from time to time enter into the Refinancing Senior Notes
Indenture, providing for the issuance from time to time of Refinancing Senior Notes by the
Borrower;

          WHEREAS, pursuant to the Subsidiary Guaranty, each Assignor (other than the Borrower) has
jointly and severally guaranteed to the Lender Secured Creditors the payment when due of the
Guaranteed Obligations (as defined in the Subsidiary Guaranty);

          WHEREAS, pursuant to the Borrower Guaranty, the Borrower has guaranteed to the Hedging
Creditors and the Credit Card Issuers the payment when due of the Guaranteed Obligations;

          WHEREAS, each Specified RAI Senior Notes Assignor (other than the Borrower) has jointly and
severally guaranteed to the New Senior Notes Creditors the payment when due of principal and
interest on the New Senior Notes;

          WHEREAS, each Specified RAI Senior Notes Assignor (other than the Borrower) may from time to
time jointly and severally guarantee to the Refinancing Senior Notes Creditors the payment when due
of principal and interest on the Refinancing Senior Notes;

          WHEREAS, certain of the Assignors have heretofore entered into a Security Agreement, dated as
of July 15, 2003, as amended and restated as July 30, 2004 and as further

2

 

amended and restated as of May 31, 2006 (as so amended and restated and as the same may be
further amended, restated, modified and/or supplemented from time to time, but not including, the
date hereof, the “Second Amended and Restated Security Agreement”);

          WHEREAS, the Assignors desire to further amend and restate the Second Amended and Restated
Security Agreement in the form of this Agreement;

          WHEREAS, the Credit Agreement requires this Agreement be executed and delivered to the
Collateral Agent by the Assignors, and the Secured Hedging Agreements and the New Senior Notes
Indenture require that this Agreement secure the respective Obligations as provided herein;

          WHEREAS, each Assignor desires to execute this Agreement to satisfy the conditions described
in the preceding paragraph;

          NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and
sufficiency of which are hereby acknowledged, each Assignor hereby makes the following
representations and warranties and hereby covenants and agrees as follows:

ARTICLE I

SECURITY INTERESTS

          1.1 Grant of Security Interests. (a) As security for the prompt and complete payment and
performance when due of all of its Applicable Obligations, each Assignor does hereby sell, assign
and transfer unto the Collateral Agent, and does hereby grant to the Collateral Agent for the
benefit of the relevant Secured Creditors as their interests may appear, a continuing security
interest in, all of the right, title and interest of such Assignor in, to and under all of the
following, whether now existing or hereafter from time to time acquired:

     (i) each and every Receivable;

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

     (iii) all Inventory;

     (iv) all Equipment;

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

     (vi) the Cash Collateral Account established for such Assignor and all moneys,
securities and instruments deposited or required to be deposited in such Cash Collateral
Account;

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

3

 

     (viii) all computer programs of such Assignor and all intellectual property rights
therein and all other proprietary information of such Assignor, including, but not limited
to, Trade Secrets Rights;

     (ix) all insurance policies;

     (x) all other Goods, General Intangibles, Chattel Paper (including without limitation
all Tangible Chattel Paper and all Electronic Chattel Paper), Documents and Instruments;

     (xi) all Permits;

     (xii) all cash;

     (xiii) all Commercial Tort Claims;

     (xiv) all Deposit Accounts and all other demand, deposit, time, savings, cash
management, passbook and similar accounts maintained by such Assignor with any Person and
all moneys, securities, Instruments and other investments deposited or required to be
deposited in any of the foregoing;

     (xv) all Investment Property;

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

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

     (xviii) all Supporting Obligations; and

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

provided that notwithstanding the foregoing, the Collateral that secures the RAI Senior
Notes Obligations of a Specified RAI Senior Notes Assignor shall be limited to Designated RAI
Senior Notes Collateral owned by such Specified RAI Senior Notes Assignor, all of which Collateral
shall also ratably secure all other Applicable Obligations of such Specified RAI Senior Notes
Assignor, and the Collateral Proceeds with respect to any item of Collateral owned by a Specified
RAI Senior Notes Assignor that are to be applied to the RAI Senior Notes Obligations shall be
limited to Collateral Proceeds from the sale, other disposition of or other realization upon, and
other moneys received in respect of, the Designated RAI Senior Notes Collateral of such Specified
RAI Senior Notes Assignor, with such Collateral Proceeds to also be applied ratably to all other
Applicable Obligations of such Specified RAI Senior Notes Assignor.

4

 

          (b) Notwithstanding anything contained herein to the contrary, (i) the term “Collateral” as
used herein shall not include any Copyright, Mark, Patent, Trade Secret, computer program or
Software to the extent such property is subject to a license or agreement the terms of which
prohibit an assignment of, or the granting of a security interest in, any Assignor’s rights
thereunder or such Assignor’s grant of a security interest pursuant to this Agreement would give
any party thereto (other than such Assignor) the right to terminate its obligations thereunder;
provided that the foregoing limitation shall not affect, limit, restrict or impair the
grant by an Assignor of the security interest pursuant to this Agreement in any account or any
money or other amounts due or to become due under any such Copyright, Mark, Patent, Trade Secret,
computer program or Software or such license or agreement governing the same, (ii) the term
“Collateral” as used herein shall not include any Equity Interests owned or held by any Assignor
and (iii) in the case of any sale, assignment, transfer or grant of a security interest hereunder
by a Restricted Assignor only, the term “Collateral” shall not include any Collateral (determined
as provided herein without regard to this clause (iii)) of such Restricted Assignor other than (x)
Collateral of the type described in clauses (v), (vi), (vii), (viii) and (xix) of Section 1.1(a)
and (y) all other Collateral of the type which may be perfected by the filling of a UCC-1 financing
statement in any relevant jurisdiction.

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

          1.2 Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral Agent
its true and lawful attorney, irrevocably, with full power after the occurrence of and during the
continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require,
demand, receive, compound and give acquittance for any and all moneys and claims for moneys due or
to become due to such Assignor under or arising out of the Collateral, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or take any action or
institute any proceedings which the Collateral Agent may deem to be necessary or advisable in the
premises, which appointment as attorney is coupled with an interest.

ARTICLE II

GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Assignor represents, warrants and covenants, which representations, warranties and covenants
shall survive execution and delivery of this Agreement, as follows:

          2.1 Necessary Filings. All notices, filings, registrations and recordings necessary or
appropriate to create, preserve, protect and perfect the security interest granted by such Assignor
to the Collateral Agent hereby in respect of all the Collateral (other than certain immaterial
Collateral not subject to perfection, notification, filing or recording requirements pursuant to
the terms of the Credit Documents) have been accomplished or shall have been accomplished within 45
days of a new Trigger Event
occurring after the Fifth Restatement Effective Date (or, in the case of Collateral constituting
Excluded Unperfected Collateral, on the date on which such Collateral ceases to qualify as such in
accordance with the definition of

5

 

Excluded Unperfected Collateral) and the security interest
granted to the Collateral Agent pursuant to this Agreement in and to all of the Collateral (other
than Excluded Unperfected Collateral) constitutes, upon satisfaction of such filings, registrations
and recordings, a perfected security interest therein superior and prior to the rights of all other
Persons therein (other than any such rights pursuant to any Permitted Liens that have a priority as
provided under applicable law) and subject to no other Liens (other than Permitted Liens) and is
entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as
enacted in any relevant jurisdiction to perfected security interests.

          2.2 No Liens. Such Assignor is, and as to all Collateral acquired by it from time to time
after the date hereof such Assignor will be, the owner of all Collateral free from any Lien,
security interest, encumbrance or other right, title or interest of any Person (other than
Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of
all Persons at any time claiming the same or any interest therein (other than in connection with
Permitted Liens) adverse to the Collateral Agent.

          2.3 Other Financing Statements. As of the date hereof, there is no financing statement (or
similar statement or instrument of registration under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the Collateral (other than financing statements
filed in respect of Permitted Liens) and at all times prior to the Termination Date, such Assignor
will not execute or authorize to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction) or statements relating
to the Collateral, except financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or as permitted by the Credit Agreement.

          2.4 Chief Executive Office; Records. As of the date hereof, the chief executive office of
such Assignor is located at the address or addresses indicated on Annex A hereto. Such Assignor
will not move its chief executive office except to such new location as such Assignor may establish
in accordance with the last sentence of this Section 2.4. The originals of all documents evidencing
all Receivables and Contract Rights and Trade Secret Rights of such Assignor and the only original
books of account and records of such Assignor relating thereto are, and will continue to be, kept
at such chief executive office and/or one or more of the locations shown on Annex A, or at such new
locations as such Assignor may establish in accordance with the last sentence of this Section 2.4.
All Receivables and Contract Rights and Trade Secret Rights of such Assignor are, and will continue
to be, maintained at, and controlled and directed (including, without limitation, for general
accounting purposes) from, the office locations described above, or such new locations as such
Assignor may establish in accordance with the last sentence of this Section 2.4. Such Assignor
shall not establish new locations for such chief executive offices until (i) it shall have given to
the Collateral Agent not less than 15 days’ prior written notice (or such lesser notice as shall be
acceptable to the Collateral Agent in the case of a new record location to be established in
connection with newly acquired Contracts) of its intention to do so, clearly describing such new
location and providing such other information in connection therewith as the Collateral Agent may
reasonably request, and (ii) with respect to such new location, it shall have taken all action,
reasonably satisfactory to the Collateral Agent, to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and
in full force and effect.

6

 

          2.5 Location of Inventory and Equipment. All Inventory and Equipment held on the date
hereof by each Assignor (other than immaterial amounts of Inventory and Equipment) is located at
one of the locations shown on Annex B attached hereto, is in transit between such locations, or is
in transit to customers.

          2.6 Legal Names; Organizational Identification Number; Trade Names; Change of Name; etc.
The exact legal name of each Assignor, and the organizational identification number (if any) of
each Assignor, as of the date hereof, is listed on Annex C hereto for such Assignor. No Assignor
has or operates in any jurisdiction under, or in the five years preceding the date hereof has had
or has operated in any jurisdiction under, any trade names, fictitious names or other names except
its legal name and such other trade or fictitious names as are listed on Annex C hereto for such
Assignor. No Assignor shall change its legal name, organizational identification number (if any)
or assume or operate in any jurisdiction under any trade, fictitious or other name except its legal
name, organizational identification number and those trade names in each case listed on Annex C
hereto for such Assignor and those that may be established in accordance with the immediately
succeeding sentence of this Section 2.6. No Assignor shall change its legal name or organizational
identification number or assume or operate in any jurisdiction under any new trade, fictitious or
other name or operate under any existing name in any additional jurisdiction until (i) it shall
have given to the Collateral Agent not less than 15 days’ prior written notice of its intention so
to do, clearly describing such new name and/or jurisdiction and, in the case of a new name, the
jurisdictions in which such new name shall be used and providing such other information in
connection therewith as the Collateral Agent may reasonably request, (ii) with respect to such new
name and/or jurisdiction, it shall have taken all action requested by the Collateral Agent as
deemed necessary or desirable, in the reasonable opinion of the Collateral Agent, to maintain the
security interest of the Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect and (iii) the Collateral Agent shall have
received evidence that all other actions (including, without limitation, the payment of all filing
fees and taxes, if any, payable in connection with such filings) have been taken, in order to
perfect (and maintain the perfection and priority of) the security interest granted hereby. In
addition, to the extent that any Assignor does not have an organizational identification number on
the date hereof and later obtains one, such Assignor shall promptly thereafter notify the
Collateral Agent of such organizational identification number and shall take all actions reasonably
satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of
the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full
force and effect.

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

          2.8 Jurisdiction and Type of Organization. The jurisdiction of organization of each
Assignor, and the type of organization of each Assignor, as of the date hereof, is listed on Annex
I hereto for such Assignor. No Assignor shall change its jurisdiction of organization or its type
of organization until (i) it shall have given to the Collateral Agent not less than 15 days’ prior
written notice of intention so to do, clearly describing such new jurisdiction of organization
and/or type of organization and providing such other information in connection therewith as the

7

 

Collateral Agent may reasonably request and (ii) with respect to such new jurisdiction of
organization and/or type of organization, it shall have taken all actions reasonably requested by
the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and effect.

          2.9 Collateral in the Possession of a Bailee. If any Inventory or other Goods (other than
immaterial amounts of Inventory and Equipment) are at any time in the possession of a bailee, the
respective Assignor shall promptly notify the Collateral Agent thereof and, if requested by the
Collateral Agent, shall use its reasonable best efforts to promptly obtain an acknowledgment from
such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee
holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions
of the Collateral Agent, without the further consent of the respective Assignor. The Collateral
Agent agrees with the Assignors that the Collateral Agent shall not give any such instructions
unless an Event of Default has occurred and is continuing or would occur after taking into account
any action by the respective Assignor with respect to any such bailee.

          2.10 As-Extracted Collateral; Timber-to-be-Cut. As of the date hereof, no Unrestricted
Assignor owns, or expects to acquire, any property which constitutes, or would constitute,
As-Extracted Collateral or Timber-to-be-Cut. If at any time after the date hereof any Unrestricted
Assignor owns, acquires or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such
Unrestricted Assignor shall furnish the Collateral Agent with prompt written notice thereof (which
notice shall describe in reasonable detail the As-Extracted Collateral and/or Timber-to-be-Cut and
the locations thereof) and shall take all actions as may be deemed reasonably necessary or
desirable by the Collateral Agent to perfect the security interest of the Collateral Agent therein.

ARTICLE III

SPECIAL PROVISIONS CONCERNING

RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS

          3.1 Additional Representations and Warranties. As of the time when each of its Receivables
arises, each Assignor shall be deemed to have represented and warranted that such Receivable, and
all material records, papers and documents relating thereto (if any) are genuine and in all
material respects what they purport to be, and that all papers and documents (if any) relating
thereto (i) will be the only original writings evidencing and embodying such obligation of the
account debtor named therein (other than copies created for general accounting purposes) and (ii)
will, to the knowledge of such Assignor, evidence true and valid obligations of the account debtor
named therein.

          3.2 Maintenance of Records. Each Assignor will keep and maintain at its own cost and
expense satisfactory and complete records of its Receivables and Contracts, and such Assignor will
make the same available to the Collateral Agent for inspection, at such Assignor’s own cost and
expense, at any and all reasonable times (i.e., during normal business hours) and upon
reasonable prior notice to such Assignor. If requested by the Collateral Agent while an

8

 

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

          3.3 Modification of Terms; etc. No Assignor shall rescind or cancel any indebtedness
evidenced by any Receivable or under any Contract, or modify any term thereof or make any
adjustment with respect thereto, or extend or renew the same, or compromise or settle any material
dispute, claim, suit or legal proceeding relating thereto, or sell any Receivable or Contract, or
interest therein, without the prior written consent of the Collateral Agent, except (i) as
permitted by Section 3.4 hereof and (ii) in accordance with such Assignor’s reasonable business
practices. Each Assignor will duly fulfill all obligations on its part to be fulfilled under or in
connection with all material Receivables and Contracts and will do nothing to impair the rights of
the Collateral Agent in the Receivables or Contracts.

          3.4 Collection. Each Assignor shall endeavor in accordance with reasonable business
practices to cause to be collected from the account debtor named in each of its Receivables or
obligor under any Contract, as and when due (including, without limitation, amounts which are
delinquent, such
amounts to be collected in accordance with generally accepted lawful collection procedures) any and
all amounts owing under or on account of such Receivable or Contract, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance of such Receivable
or under such Contract, except that, so long as no Event of Default is then in existence in respect
of which the Collateral Agent has given notice that this exception is no longer applicable, any
Assignor may allow in the ordinary course of business as adjustments to amounts owing under its
Receivables and Contracts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, which such Assignor finds appropriate in
accordance with sound business judgment and (ii) a refund or credit due as a result of returned or
damaged merchandise or improperly performed services. The reasonable costs and expenses
(including, without limitation, attorneys’ fees) of collection, whether incurred by any Assignor or
the Collateral Agent, shall be borne by such Assignor.

          3.5 Direction to Account Debtors; etc. Upon the occurrence and during the continuance of a
Noticed Event of Default, and if the Collateral Agent so directs any Assignor, to the extent
permitted by applicable law, such Assignor agrees (x) to cause all payments on account of the
Receivables and Contracts to be made directly to the Cash Collateral Account, (y) that the
Collateral Agent may, at its option, directly notify the obligors with respect to any Receivables
and/or under any Contracts to make payments with respect thereto as provided in preceding clause
(x) and (z) that the Collateral Agent may enforce collection of any Receivables or Contracts and
may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same
extent as the Assignor. The Collateral Agent may apply any or all amounts then in, or thereafter
deposited in, the Cash Collateral Account in the manner provided

9

 

in Section 7.4 of this Agreement.
The reasonable costs and expenses (including reasonable attorneys’ fees) of collection, whether
incurred by any Assignor or the Collateral Agent, shall be borne by such Assignor. The Collateral
Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant
Assignor; provided that, the failure of the Collateral Agent to so notify such Assignor
shall not affect the effectiveness of such notice or the other rights of the Collateral Agent
created by this Section 3.5.

          3.6 Instruments. If any Assignor owns or acquires any Instrument, such Assignor will
within 30 Business Days notify the Collateral Agent thereof, and upon request by the Collateral
Agent promptly deliver such Instrument (other than checks payable to any Assignor and processed in
the ordinary course of business) to the Collateral Agent appropriately endorsed to the order of the
Collateral Agent as further security hereunder.

          3.7 Further Actions. Each Assignor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements,
powers of attorney, certificates, reports and other assurances or instruments and take such further
steps, including any and all actions as may be necessary or required under the Federal Assignment
of
Claims Act, relating to its Receivables, Contracts, Instruments and other property or rights
covered by the security interest hereby granted, as the Collateral Agent may reasonably require to
give effect to the purposes of this Agreement.

          3.8 Assignors Remain Liable Under Receivables and Contracts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the Receivables and each
Contract to observe and perform all of the conditions and obligations to be observed and performed
by them thereunder, all in accordance with the terms of the agreement giving rise to such
Receivables or such Contract. Neither the Collateral Agent nor any other Secured Creditor shall
have any obligation or liability under any Receivable (or any agreement giving rise thereto) or any
Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or
any other Secured Creditor of any payment relating to such Receivable or such Contract pursuant
hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any Receivable (or any
agreement giving rise thereto) or any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by them or as to the sufficiency of any
performance by any party under any Receivable (or any agreement giving rise thereto) or any
Contract, to present or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to them or to which they may be entitled at
any time or times.

          3.9 Deposit Accounts; Etc. (a) No Unrestricted Assignor maintains, or at any time after
the date hereof shall establish or maintain, any demand, time, savings, passbook or similar
account, except for such accounts maintained with a bank (as defined in Section 9-102 of the UCC)
whose jurisdiction (determined in accordance with Section 9-304 of the UCC) is within a State of
the United States, provided that an Unrestricted Assignor may maintain or establish an
account or accounts outside of the United States on terms, and in circumstances, reasonably
acceptable to the Collateral Agent, so long as (i) the aggregate amount of cash in all such
accounts maintained outside the United States (exclusive of any amounts deposited in any

10

 

such
account representing monies from revenue generated exclusively from operations outside the United
States) shall not exceed $150,000,000 and (ii) the aggregate amount of cash in all such accounts
maintained outside the United States in excess of the amount permitted in preceding clause (i) does
not exceed an amount reasonably satisfactory to the Collateral Agent (each such account outside the
United States meeting the foregoing requirements, a “Non-U.S. Deposit Account”). Annex J
hereto accurately sets forth, as of the date of this Agreement, for each Unrestricted Assignor,
each Deposit Account maintained by such Unrestricted Assignor (including a description thereof and
the respective account number), the name of the respective bank with which such Deposit Account is
maintained, and the jurisdiction of the respective bank with respect to such Deposit Account. For
each Perfected Deposit Account, the respective Unrestricted Assignor shall cause the bank with
which the Perfected Deposit Account is maintained to execute and deliver to the Collateral Agent,
within 60 days after the Fifth Restatement Effective Date or, if later, at the time of the
establishment of the respective Perfected Deposit Account, a “control agreement” in the form of
Annex L hereto (appropriately completed), with such changes thereto as may be approved by the
Collateral Agent (such approval not to be unreasonably withheld). If any bank
with which a Perfected Deposit Account is maintained refuses to, or does not, enter into such a
“control agreement”, then the respective Unrestricted Assignor shall promptly (and in any event
within 60 days after the Fifth Restatement Effective Date or, if later, 60 days after the opening
of such account) close the respective Perfected Deposit Account and transfer all balances therein
to the Cash Collateral Account or another Perfected Deposit Account meeting the requirements of
this Section 3.9. If any bank with which a Perfected Deposit Account is maintained refuses to
subordinate all its claims with respect to such Perfected Deposit Account to the Collateral Agent’s
security interest therein on terms satisfactory to the Collateral Agent, then the Collateral Agent,
at its option, may (x) require that such Perfected Deposit Account be terminated in accordance with
the immediately preceding sentence or (y) agree to a “control agreement” without such
subordination, provided that in such event the Collateral Agent may at any time, at its option,
subsequently require that such Perfected Deposit Account be terminated (within 60 days after notice
from the Collateral Agent) in accordance with the requirements of the immediately preceding
sentence.

          (B) After the date hereof, no Unrestricted Assignor shall establish any new demand, time,
savings, passbook or similar account, except for Perfected Deposit Accounts established and
maintained with banks and meeting the requirements of preceding clause (a). At the time any such
Perfected Deposit Account is established, the appropriate “control agreement” shall be entered into
in accordance with the requirements of preceding clause (a) and the respective Unrestricted
Assignor shall furnish to the Collateral Agent a supplement to Annex J hereto containing the
relevant information with respect to the respective Perfected Deposit Account and the bank with
which same is established.

          3.10 Letter-of-Credit Rights. If any Unrestricted Assignor is at any time a beneficiary
under a letter of credit with a stated amount of $1,000,000 or more, such Unrestricted Assignor
shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent,
such Unrestricted Assignor shall, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, use its reasonable best efforts to (i) arrange for the issuer
and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of
the proceeds of any drawing under such letter of credit or (ii) arrange for the Collateral

11

 

Agent to
become the transferee beneficiary of such letter of credit, with each Unrestricted Assignor and the
Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be applied as provided in this Agreement after the occurrence and during the
continuance of a Noticed Event of Default (it being understood and agreed that at any time prior to
the occurrence of a Noticed Event of Default, such proceeds shall be directed to the relevant
Assignor).

          3.11 Commercial Tort Claims. All Commercial Tort Claims of each Unrestricted Assignor
and any events or circumstances that would reasonably be expected to give rise to any Commercial
Tort Claims of each Unrestricted Assignor as of the date of this Agreement are described in Annex K
hereto. If any Unrestricted Assignor shall at any time and from time to time after the date hereof
become aware of any Commercial Tort Claims or events or circumstances that would reasonably be
expected to give rise to a Commercial Tort Claim of such Unrestricted Assignor, in an amount
(taking the greater of the aggregate claimed damages thereunder or the reasonably estimated
value thereof) of $1,000,000 or more, such Unrestricted Assignor shall (i) promptly notify the
Collateral Agent thereof in a writing signed by such Assignor and describing the details thereof
and shall grant to the Collateral Agent in such writing a security interest in all such Commercial
Tort Claims and in the proceeds thereof, all upon the terms of this Agreement, with such writing to
be in form and substance reasonably satisfactory to the Collateral Agent and (ii) perform all
actions reasonably requested by the Collateral Agent to perfect such security interest in such
Commercial Tort Claims.

          3.12 Chattel Paper. Upon the request of the Collateral Agent made at any time or from
time to time, each Unrestricted Assignor shall promptly furnish to the Collateral Agent a list of
all Electronic Chattel Paper held or owned by such Unrestricted Assignor. Furthermore, if
requested by the Collateral Agent, each Unrestricted Assignor shall promptly take all actions which
are reasonably practicable so that the Collateral Agent has “control” of all Electronic Chattel
Paper in accordance with the requirements of Section 9-105 of the UCC. Each Unrestricted Assignor
will promptly (and in any event within 10 days) following any request by the Collateral Agent,
deliver all of its Tangible Chattel Paper to the Collateral Agent.

ARTICLE IV

SPECIAL PROVISIONS CONCERNING TRADEMARKS

          4.1 Additional Representations and Warranties. Each Assignor represents and warrants as of
the date hereof that it is the true and lawful owner of the United States Patent and Trademark
Office registrations, and applications for registrations, of the Marks listed in Annex D, Part I
attached hereto. Annex D lists or otherwise describes all the United States Patent and Trademark
Office, or the equivalent office thereof in any foreign country, registrations and applications for
registrations, of the Marks that such Assignor now uses in connection with its business. Each
Assignor represents and warrants as of the date hereof that: (i) the material registrations listed
on Annex D Part I are valid, subsisting and have not been cancelled; (ii) it is not aware of any
third-party claim that any of said material registrations or applications for material registration
with respect to a

12

 

Mark is invalid or unenforceable; and (iii) it is not aware of any reason that
any of said material registrations or applications for registration with respect to a Mark is
invalid or unenforceable, or of any reason that any of said material applications will not pass to
registration. Each Assignor represents and warrants as of the date hereof that except with respect
to those marks set forth in Annex D, Part II, it owns, or otherwise has the right to use all
material Marks that it uses. Each Assignor further warrants as of the date hereof that it is not
aware of any third party claiming that such Assignor’s use of a Mark material to the operation of
the Assignor’s business violates in any material respect any property right of that party. Each
Assignor represents and warrants that upon the recordation of an Assignment of Security Interest in
United States Trademarks and Patents in the form of Annex G hereto in the United States Patent and
Trademark Office, together with filings on Form UCC-1 pursuant to this Agreement, all filings,
registrations and recordings necessary or appropriate to perfect the
security interest granted to the Collateral Agent in the United States Marks covered by this
Agreement under federal law will have been accomplished. Each Assignor agrees to execute such an
Assignment of Security Interest in United States Trademarks and Patents covering all of such
Assignor’s right, title and interest in each United States Mark, and the associated goodwill, of
such Assignor, and to deliver to the Collateral Agent the same. Each Assignor hereby grants to the
Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the
continuance of a Noticed Event of Default, any document which may be required by the United States
Patent and Trademark Office in order to effect an absolute assignment of all such Assignor’s right,
title and interest in each United States Mark owned by an Assignor, and record the same.

          4.2 Licenses and Assignments. Subject to the provisions of Sections 4.4 and 4.5, each
Assignor hereby agrees not to divest itself of any right under a Mark other than in the ordinary
course of business absent prior written approval of the Collateral Agent.

          4.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to notify the
Collateral Agent in writing of the name and address of, and to furnish such pertinent information
that may be available with respect to, any party who may be infringing or otherwise violating in
any material respect any of such Assignor’s rights in and to any Mark material to the operation of
its business, or with respect to any party claiming that such Assignor’s use of any Mark material
to the operation of its business violates in any material respect any property right of that party.
Each Assignor further agrees, to prosecute diligently any Person infringing in any material
respect any Mark owned by such Assignor in a manner consistent with its past practice and in
accordance with reasonable business practices.

          4.4 Preservation of Marks. Each Assignor agrees to use or license the use of its Marks in
interstate commerce during the time in which this Agreement is in effect, sufficiently to preserve
such Marks as trademarks or service marks registered under the laws of the United States or the
relevant foreign jurisdiction; provided, that no Assignor shall be obligated to preserve
any Mark in the event such Assignor determines, in its reasonable business judgment, that the
preservation of such Mark is no longer necessary in the conduct of its business.

          4.5 Maintenance of Registration. Each Assignor shall, at its own expense, diligently
process all documents required to maintain trademark registrations, including but not limited to
affidavits of use and applications for renewals of registration in the United States Patent and
Trademark Office or equivalent governmental agency in any foreign jurisdiction for

13

 

all of its Marks
(excluding unregistered Marks), and shall pay all fees and disbursements in connection therewith,
and shall not abandon any such filing of affidavit of use or any such application of renewal prior
to the exhaustion of all administrative and judicial remedies without prior written consent of the
Collateral Agent; provided, that no Assignor shall be obligated to maintain any Mark or
prosecute any such
application for registration in the event that such Assignor determines, in its reasonable business
judgment, that such Mark or application is no longer necessary in the conduct of its business.

          4.6 Future Registered Marks. If any Mark registration issues hereafter to any Assignor as
a result of any application now or hereafter pending before the United States Patent and Trademark
Office or equivalent governmental agency in any foreign jurisdiction, at the time of the delivery
(or required delivery) of the annual or quarterly financial information of the Borrower to the
Lenders pursuant to Section 7.01(a) or (b), as the case may be, of the Credit Agreement, except to
the extent such application has been the subject of the delivery of a grant of security
substantially the same as the form of Annex G hereof to the Collateral Agent, such Assignor shall
deliver a copy of the related registration certificate, and a grant of security in such mark to the
Collateral Agent, confirming the grant thereof hereunder, the form of such confirmatory grant to be
substantially the same as the form of Annex G hereof or in such other form as may be reasonably
acceptable to the Collateral Agent.

          4.7 Remedies. If a Noticed Event of Default shall occur and be continuing, the Collateral
Agent may, by written notice to the relevant Assignor, take any or all of the following actions:
(i) declare the entire right, title and interest of such Assignor in and to each of the Marks,
together with all trademark rights and rights of protection to the same, vested, in which event
such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of
the relevant Secured Creditors pursuant to a trademark security agreement substantially in the form
of Annex G attached hereto, pursuant to which all of such Assignor’s rights, title and interest in
and to the Marks are assigned to the Collateral Agent for the benefit of the relevant Secured
Creditors; (ii) take and use or sell the Marks and the goodwill of such Assignor’s business
symbolized by the Marks and the right to carry on the business and use the assets of such Assignor
in connection with which the Marks have been used; and (iii) direct such Assignor to refrain, in
which event such Assignor shall refrain, from using the Marks in any manner whatsoever, directly or
indirectly, and, if requested by the Collateral Agent, change such Assignor’s corporate name to
eliminate therefrom any use of any Mark and execute such other and further documents that the
Collateral Agent may request to further confirm this and to transfer ownership of the Marks and
registrations and any pending trademark application in the United States Patent and Trademark
Office or any equivalent governmental agency or office in any foreign jurisdiction to the
Collateral Agent.

ARTICLE V

SPECIAL PROVISIONS CONCERNING
TRADE SECRET RIGHTS, PATENTS AND COPYRIGHTS

          5.1 Additional Representations and Warranties. Except as set forth in the Annexes attached
hereto, each Assignor represents and warrants as of the date hereof that it is

14

 

the true and lawful
owner or licensee of all rights in (i) all Trade Secrets,
(ii) the Patents of such Assignor listed in Annex E attached hereto and that said Patents
constitute all the patents and applications for patents that such Assignor now owns and (iii) the
Copyrights of such Assignor listed in Annex F attached hereto and that said Copyrights constitute
all the registered copyrights and applications for copyright registrations that such Assignor now
owns. Except as set forth on Annex F, each Assignor further warrants as of the date hereof that it
is not aware of any third party claim that such Assignor’s use of any patent or any copyright
material to the operation of the Assignor’s business infringes or will infringe any material patent
or any material copyright owned by or licensed to any third party or that such Assignor has
misappropriated any material Trade Secret owned by or licensed to any third party. Each Assignor
represents and warrants that upon the recordation of an Assignment of Security Interest in United
States Trademarks and Patents in the form of Annex G hereto in the United States Patent and
Trademark Office and the recordation of an Assignment of Security Interest in United States
Copyrights in the form of Annex H hereto in the United States Copyright Office, together with
filings on Form UCC-1 pursuant to this Agreement, all filings, registrations and recordings
necessary or appropriate to perfect the security interest granted to the Collateral Agent in the
United States Patents and United States Copyrights covered by this Agreement under federal law will
have been accomplished. Upon obtaining any Patent, each Assignor agrees to execute an Assignment
of Security Interest in United States Trademarks and Patents, except to the extent the application
therefor has been the subject of the delivery of a grant of security substantially the same as the
form of Annex G or H hereto to the Collateral Agent, covering all right, title and interest in each
United States Patent of such Assignor and to deliver same to the Collateral Agent, and upon
obtaining any registration of a Copyright, to execute such an Assignment of Security Interest in
United States Copyrights, except to the extent the application therefor has been the subject of the
delivery of a grant of security substantially the same as the form of Annex G or H hereto to the
Collateral Agent, covering all right, title and interest in each such registered United States
Copyright of such Assignor and to deliver same to the Collateral Agent. Each Assignor hereby
grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and
during the continuance of any Event of Default, any document which may be required by the U.S.
Patent and Trademark Office or equivalent governmental agency in any foreign jurisdiction or the
U.S. Copyright Office or equivalent governmental agency in any foreign jurisdiction in order to
effect an absolute assignment of all right, title and interest in each Patent and Copyright, and to
record the same.

          5.2 Licenses and Assignments. Subject to the provisions of Sections 5.4 and 5.5, each
Assignor hereby agrees not to divest itself of any right under a Patent or Copyright other than in
the ordinary course of business absent prior written approval of the Collateral Agent.

          5.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish the
Collateral Agent in writing with all pertinent information available to such Assignor with respect
to any material infringement or other violation of such Assignor’s rights in any Patent or
Copyright, in each case material to its business, or with respect to any claim that the practice of
any Patent or the use of any work of authorship with respect to which there exists a Copyright, in
each case material to its business, violates in any material respect any property right of a third
party or with respect to any
misappropriation of any Trade Secret material to its business or any claim that the practice of any
Trade Secret material to its business violates any

15

 

property right of a third party. To the extent
consistent with its past practice and in accordance with reasonable business practices, each
Assignor further agrees, to prosecute diligently any Person materially infringing any Patent or
Copyright owned by such Assignor or any Person misappropriating any Trade Secret.

          5.4 Maintenance of Patents or Copyrights. At its own expense, each Assignor shall make
timely payment of all post-issuance fees required to maintain in force rights under each of its
Patents and Copyrights; provided, that no Assignor shall be obligated to maintain any
Patent in the event such Assignor determines, in its reasonable business judgment, that the
maintenance of such Patent is no longer necessary in the conduct of its business.

          5.5  Prosecution of Patent or Copyright Application. At its own expense, each Assignor
shall diligently prosecute all applications for (i) Patents of such Assignor listed on Annex E
hereto and (ii) Copyrights listed on Annex F hereto, and, in each case, shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies, absent written consent
of the Collateral Agent, provided that no Assignor shall be obligated to prosecute or
maintain any Patent or Copyright in the event such Assignor determines it is no longer necessary in
the conduct of its business.

          5.6 Other Patents and Copyrights. At the time of the delivery (or required delivery) of
the annual or quarterly financial information of the Borrower to the Lenders pursuant to Section
7.01(a) or (b), as the case may be, of the Credit Agreement, the relevant Assignor shall, except to
the extent the application therefor has been the subject of the delivery of a grant of security
substantially the same as the form of Annex G or H hereto to the Collateral Agent, deliver to the
Collateral Agent information of the type required by Annex E or Annex F hereto (as applicable)
relating to each newly acquired or issued Patent or Copyright, as the case may be, with a grant of
security as to such Patent or Copyright, as the case may be, confirming the grant thereof
hereunder, the form of such confirmatory grant to be substantially in the form of Annex G or Annex
H, as the case may be, hereto; provided, that no Assignor (i) shall be obligated to
prosecute any application in the event such Assignor determines, in its reasonable business
judgment, that such application is no longer necessary in the conduct of its business and (ii)
shall be obligated to provide a copy of a Patent application or any other information with respect
to an application for a Patent or Copyright registration (other than the application date and
filing number and such other identifying information necessary to perfect a security interest in
the respective Patent or Copyright) if such Assignor reasonably believes such information is
confidential or such disclosure would materially impair or prejudice Assignor’s rights under such
application or registration.

          5.7 Remedies. If a Noticed Event of Default shall occur and be continuing, the Collateral
Agent may by written notice to the relevant Assignor take any or all of the following actions: (i)
declare the entire right, title and interest of such Assignor in each of the Patents and Copyrights
vested, in
which event such right, title and interest shall immediately vest in the Collateral Agent for the
benefit of the relevant Secured Creditors, pursuant to a patent security agreement or copyright
security agreement, as the case may be, substantially in the form of Annex G or Annex H,
respectively, executed by such Assignor and filed on the date hereof, pursuant to which all of such
Assignor’s right, title, and interest to such Patents and Copyrights are assigned to the Collateral
Agent for the benefit of the relevant Secured Creditors; (ii) take

16

 

and practice, use or sell the
Patents and Copyrights; (iii) direct such Assignor to refrain, in which event such Assignor shall
refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such
Assignor shall execute such other and further documents as the Collateral Agent may request further
to confirm this and to transfer ownership of the Patents and Copyrights to the Collateral Agent for
the benefit of the relevant Secured Creditors.

ARTICLE VI

PROVISIONS CONCERNING ALL COLLATERAL

          6.1 Protection of Collateral Agent’s Security. Each Assignor will at all times keep its
Inventory and Equipment insured in favor of the Collateral Agent, at its own expense, to the extent
required by the Credit Agreement; copies of all policies or certificates with respect to such
insurance (i) shall be endorsed to the Collateral Agent’s reasonable satisfaction for the benefit
of the Collateral Agent (including, without limitation, by naming the Collateral Agent as loss
payee and the Collateral Agent and the other relevant Secured Creditors as additional insureds),
(ii) shall state that such insurance policies shall not be cancelled or materially revised without
at least 30 days’ (or at least 10 days’ in the case of nonpayment of premium) prior written notice
thereof by the insurer to the Collateral Agent and (iii) shall be deposited with the Collateral
Agent. If any Assignor shall fail to insure such Inventory or Equipment to the extent required by
the Credit Agreement, or if any Assignor shall fail to so endorse and deposit copies of all
policies or certificates with respect thereto, the Collateral Agent shall have the right (but shall
be under no obligation), upon prior written notice to such Assignor, to procure such insurance and
such Assignor agrees to reimburse the Collateral Agent for all reasonable costs and expenses of
procuring such insurance. Except as otherwise provided in the Credit Agreement, the Collateral
Agent shall apply any proceeds of such insurance required after a Noticed Event of Default in
accordance with Section 7.4 (it being understood that so long as no Noticed Event of Default has
occurred and is continuing, the Collateral Agent will release any interest it has in the proceeds
of any casualty insurance to the Assignors). Each Assignor assumes all liability and
responsibility in connection with the Collateral acquired by it and the liability of such Assignor
to pay its Obligations shall in no way be affected or diminished by reason of the fact that such
Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such
Assignor.

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

          6.3 Financing Statements. Each Assignor agrees to execute and deliver to the Collateral
Agent such financing statements, in form acceptable to the Collateral Agent, as the

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Collateral
Agent may from time to time reasonably request or as are reasonably necessary or desirable in the
reasonable opinion of the Collateral Agent to establish and maintain a valid, enforceable, first
priority perfected security interest in the Collateral (subject to the Permitted Liens) as provided
herein and the other rights and security contemplated hereby all in accordance with the UCC as
enacted in any and all relevant jurisdictions or any other relevant law. Each Assignor will pay
any applicable filing fees, recordation taxes and related expenses. Each Assignor hereby
authorizes the Collateral Agent to file any such financing statements (including, without
limitation, (x) financing statements which list the Collateral specifically and/or “all assets” as
collateral and (y) “in lieu of” financing statements) without the signature of such Assignor where
permitted by law.

          6.4 Additional Information. Each Assignor will, at its own expense, from time to time upon
the reasonable request of the Collateral Agent, promptly (and in any event within 10 days after its
receipt of the respective request) furnish to the Collateral Agent such information with respect to
the Collateral (including the identity of the Collateral or such components thereof as may have
been requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be
requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees that it
shall promptly (and in any event within 10 days after its receipt of the respective request)
furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably
requested by the Collateral Agent.

ARTICLE VII

REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT

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

     (i) personally, or by agents or attorneys, immediately take possession of the
Collateral or any part thereof, from such Assignor or any other Person who then has
possession of any part thereof with or without notice or process of law, and for that
purpose may enter upon such Assignor’s premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all services, supplies, aids
and other facilities of such Assignor;

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

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     (iii) instruct all banks which have entered into a control agreement with the
Collateral Agent to transfer all moneys, securities and instruments held by such depository
bank to the Cash Collateral Account and withdraw all moneys, securities and instruments in
the Cash Collateral Account for application to the Obligations in accordance with Section
7.4 hereof;

     (iv) sell, assign or otherwise liquidate, or direct such Assignor to sell, assign or
otherwise liquidate, any or all of the Collateral or any part thereof in accordance with
Section 7.2 hereof, and take possession of the proceeds of any such sale or liquidation;

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

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

     (B) store and keep any Collateral so delivered to the Collateral Agent at such
place or places pending further action by the Collateral Agent as provided in
Section 7.2, and

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

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

     (vii) apply any moneys constituting Collateral or proceeds thereof in accordance with
Section 7.4; and

     (viii) take any other action as specified in clauses (1) through (5), inclusive, of
Section 9-607 of the UCC

(it being understood that such Assignor’s obligation so to deliver the Collateral is of the essence
of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction,
the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor
of said obligation). By accepting the benefits of this Agreement and each other Security Document,
the Secured Creditors expressly acknowledge and agree that (x) this Agreement and each other
Security Document may be enforced only by the action of the Collateral Agent acting upon the
instructions of the Required Lenders or, if the CA Termination Date has occurred, the holders of a
majority of the outstanding principal amount of all remaining Obligations, provided that if
prior to the CA Termination Date a payment default with respect to at least $300,000,000 principal
amount in the aggregate of New Senior Notes and/or Refinancing Senior Notes has continued for at
least 180 days (and such defaulted payment has not been

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received pursuant to a drawing under any
letter of credit), the holders of a majority of the outstanding principal amount of the
Indebtedness subject to such payment default or defaults can direct the Collateral Agent to
commence and continue enforcement of the Liens created hereunder, which the Collateral Agent shall
comply with subject to receiving any indemnity which it reasonably requests, provided
further that the Collateral Agent shall thereafter comply only with the directions of the
Required Lenders as to carrying out such enforcement so long as such directions are not adverse to
the aforesaid directions of the holders of Indebtedness subject to such payment default or
defaults, and (y) no other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Agreement or any other Security Document or to realize upon the security to be
granted hereby or thereby, it being understood and agreed that such rights and remedies shall be
exercised exclusively by the Collateral Agent for the benefit of the Secured Creditors as their
interest may appear upon the terms of this Agreement and the other Security Documents.

          7.2 Remedies; Disposition of the Collateral. Upon the occurrence and continuance of a
Noticed Event of Default, any Collateral repossessed by the Collateral Agent under or pursuant to
Section 7.1 and any other Collateral whether or not so repossessed by the Collateral Agent, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and
without the necessity of gathering at the place of sale the property to be sold, and in general in
such manner, at such time or times, at such place or places and on such terms as the Collateral
Agent may, in compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in
the condition in which the same existed when taken by the Collateral Agent or after any overhaul or
repair which the Collateral Agent shall determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceedings permitted by such
requirements shall be made upon not less than ten (10) days’ written notice to the relevant
Assignor specifying the time at which such disposition is to be made and the intended sale price or
other consideration therefor, and shall be subject, for the ten (10) days after the giving of such
notice, to the right of the relevant Assignor or any nominee of such Assignor to acquire the
Collateral involved at a price or for such other consideration at least equal to the intended sale
price or other consideration so specified. Any such disposition which shall be a public sale
permitted by such requirements
shall be made upon not less than ten (10) days’ written notice to the relevant Assignor specifying
the time and place of such sale and, in the absence of applicable requirements of law, shall be by
public auction (which may, at the Collateral Agent’s option, be subject to reserve), after
publication of notice of such auction not less than 10 days prior thereto in one newspaper in
general circulation in the City of New York and one newspaper in general circulation in Winston
Salem, North Carolina. To the extent permitted by any such requirement of law, the Collateral
Agent on behalf of the Secured Creditors (or certain of them) may bid for and become the purchaser
(by bidding in the Obligations or otherwise) of the Collateral or any item thereof, offered for
sale in accordance with this Section without accountability to the relevant Assignor (except to the
extent of surplus money received as provided in Section 7.4). If, under mandatory requirements of
applicable law, the Collateral Agent shall be required to make disposition of the Collateral within
a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove
specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be
reasonably practicable in view of such mandatory requirements of applicable law.

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

     (i) all damages occasioned by such taking of possession or any such disposition except
any damages which are the direct result of the Collateral Agent’s gross negligence or
willful misconduct;

     (ii) all other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and

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

Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral
shall operate to divest all right, title, interest, claim and demand, either at law or in equity,
of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such
Assignor.

          7.4 Application of Proceeds. (a) All moneys collected by the Collateral Agent upon any
sale, other disposition of or other realization upon any Collateral, together with all other moneys
received by the Collateral Agent hereunder (collectively, the “Collateral Proceeds”), shall
be applied as follows:

     (i) first, to the payment of all Obligations owing to the Collateral Agent of
the type described in clauses (vi), (vii) and (viii) of the definition of “Obligations”
contained in Article IX hereof;

     (ii) second, to the extent proceeds of the sale, any disposition of or other
realization upon any item of Collateral remain after the application pursuant to preceding
clause (i), an amount equal to the outstanding Applicable Obligations secured by such item
of Collateral shall be paid to the Secured Creditors as their interests may appear, with (x)
each Secured Creditor receiving an amount equal to its outstanding Applicable Obligations
secured by such item of Collateral or, if the proceeds are insufficient to pay in full all
such Applicable Obligations, its Pro Rata Share of the amount so remaining
to

21

 

be distributed and (y) in the case of the Credit Document Obligations, the New Senior
Notes Obligations and the Refinancing Senior Notes Obligations included in such Applicable
Obligations, any such amount to be applied (1) first to the payment of interest in
respect of the unpaid principal amount of Loans, New Senior Notes or Refinancing Senior
Notes, as the case may be, (2) second to the payment of principal of Loans, New
Senior Notes or Refinancing Senior Notes, as the case may be, and (3) third to the
other Credit Document Obligations, New Senior Notes Obligations or Refinancing Senior Notes
Obligations, as the case may be; and

     (iii) third, to the extent proceeds remain after the application pursuant to
the preceding clauses (i) and (ii), to the relevant Assignor or, to the extent directed by
such Assignor or a court of competent jurisdiction, to whomever may be lawfully entitled to
receive such surplus.

          (b) For purposes of this Agreement, “Pro Rata Share” shall mean when
calculating a Secured Creditor’s portion of any distribution or amount pursuant to Section 7.4(a),
the amount (expressed as a percentage) equal to a fraction the numerator of which is the then
outstanding amount of the relevant Applicable Obligations secured by the relevant item of
Collateral owed such Secured Creditor and the denominator of which is the then outstanding amount
of all Applicable Obligations secured by the relevant item of Collateral.

          (c) All payments required to be made to the (i) Lender Creditors hereunder shall be made to
the Administrative Agent for the account of the respective Lender Creditors, (ii) Credit Card
Issuers hereunder shall be made to the Credit Card Issuer(s) under the applicable Secured Credit
Card Agreement, (iii) Hedging Creditors hereunder shall be made to the paying agent under the
applicable Secured Hedging Agreement or, in the case of Secured Hedging Agreements without a paying
agent, directly to the applicable Hedging Creditors, (iv) New
Senior Notes Creditors hereunder shall be made to the New Senior Notes Trustee for the account
of the respective New Senior Notes Creditors, and (v) Refinancing Senior Notes Creditors hereunder
shall be made to the Refinancing Senior Notes Trustee for the account of the respective Refinancing
Senior Notes Creditors.

          (d) For purposes of applying payments received in accordance with this Section 7.4, the
Collateral Agent shall be entitled to rely upon (i) the Administrative Agent for a determination of
the outstanding Credit Document Obligations, (ii) any Credit Card Issuer for a determination of the
outstanding Credit Card Obligations owed to such Credit Card Issuer, (iii) any Hedging Creditor for
a determination of the outstanding Hedging Obligations owed to such Hedging Creditor, (iv) the New
Senior Notes Trustee for a determination of the outstanding New Senior Notes Obligations, and (v)
the Refinancing Senior Notes Trustee for a determination of the outstanding Refinancing Senior
Notes Obligations. Unless it has actual knowledge (including by way of written notice from a
Secured Creditor) to the contrary, the Administrative Agent under the Credit Agreement, in
furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Credit Document Obligations other than principal,
interest and regularly accruing fees are owing to any Lender Creditor.

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          (e) It is understood that each Assignor shall remain liable to the extent of any deficiency
between (x) the amount of the obligations for which it is liable directly or as a Guarantor that
are satisfied with proceeds of the Collateral and (y) the aggregate outstanding amount of such
Obligations.

          7.5 Remedies Cumulative. Each and every right, power and remedy hereby specifically given
to the Collateral Agent shall be in addition to every other right, power and remedy specifically
given under this Agreement or any other Secured Debt Agreement or now or hereafter existing at law
or in equity, or by statute and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time or simultaneously and as often and
in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of exercise of one shall not be
deemed a waiver of the right to exercise of any other or others. No delay or omission of the
Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of
any of the Obligations shall impair any such right, power or remedy or shall be construed to be a
waiver of any Default or Event of Default or an acquiescence therein. In the event that the
Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled
to judgment, then in such suit the Collateral Agent may recover expenses, including attorneys’
fees, and the amounts thereof shall be included in such judgment.

          7.6 Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry
or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such case the relevant
Assignor, the Collateral Agent and
each holder of any of the Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interest created under this
Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such
proceeding had been instituted (except to the extent of a determination adverse to the Collateral
Agent in such a proceeding).

ARTICLE VIII

INDEMNITY

          8.1 Indemnity. (a) Each Assignor jointly and severally agrees to indemnify, reimburse and
hold the Collateral Agent, each other Secured Creditor and their respective successors, permitted
assigns, employees, agents and servants (hereinafter in this Section 8.1 referred to individually,
as “Indemnitee,” and collectively as “Indemnitees”) harmless from any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments
and any and all reasonable costs and expenses (including reasonable attorneys’ fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called “expenses”) of
whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in
any way relating to or arising out of this Agreement, or the documents executed in connection
herewith or in any other way connected with the enforcement of any of the terms of, or the
preservation of any rights hereunder, or in any way relating to or arising out

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of the manufacture,
ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the Collateral (including,
without limitation, latent or other defects, whether or not discoverable), the violation of the
laws of any country, state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property damage), or
contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 8.1(a)
for expenses, losses, damages or liabilities to the extent caused by the gross negligence or wilful
misconduct of such Indemnitee. Each Assignor agrees that upon written notice by any Indemnitee of
the assertion of such a liability, obligation, loss, damage, penalty, claim, demand, action,
judgment or suit, such Assignor shall assume full responsibility for the defense thereof. Each
Indemnitee agrees to use its best efforts to promptly notify such Assignor of any such assertion of
which such Indemnitee has knowledge.

          (b) Without limiting the application of Section 8.1(a), each Assignor agrees, jointly and
severally, to pay, or reimburse the Collateral Agent for (if the Collateral Agent shall have
incurred fees, costs or expenses because such Assignor shall have failed to comply with its
obligations under this Agreement) any and all reasonable fees, costs and expenses of whatever kind
or nature incurred in connection with the creation, preservation or protection of the Collateral
Agent’s Liens on, and security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and documents in public
offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other reasonable fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral and the
Collateral Agent’s interest therein, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral. Any reference in this Agreement, to “fees of counsel” or other similar
phraseology shall mean the actual and reasonable fees incurred at customary and reasonable hourly
rates in the jurisdiction in which the services of such counsel are performed, not pursuant to any
statutory formula or percentage calculation.

          (c) Without limiting the application of Section 8.1(a) or (b), each Assignor jointly and
severally agrees to pay, indemnify and hold each Indemnitee harmless from and against any loss,
costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or
growing out of any material misrepresentation by an Assignor in this Agreement, or in any statement
or writing contemplated by or made or delivered pursuant to or in connection with this Agreement.

          (d) If and to the extent that the obligations of any Assignor under this Section 8.1 are
unenforceable for any reason, each Assignor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under applicable law.

          8.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations
secured by the Collateral. The indemnity obligations of each Assignor contained in this Article
VIII shall continue in full force and effect notwithstanding the full payment of all the

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Notes
issued under the Credit Agreement, the termination of all Secured Hedging Agreements, the full
payment of all New Senior Notes issued under the New Senior Notes Indenture, the full payment of
all Refinancing Senior Notes issued under the Refinancing Senior Notes Indenture and the payment of
all of the other Obligations and notwithstanding the discharge thereof.

ARTICLE IX

DEFINITIONS

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

          “Additional Senior Notes” shall have the meaning provided in the Credit Agreement.

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

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

          “As-Extracted Collateral” shall mean “as-extracted collateral” as such term is defined
in the UCC.

          “Assignor” shall have the meaning specified in the first paragraph of this Agreement.

          “Applicable Obligations” shall mean (i) for each Assignor that is a Specified RAI
Senior Notes Assignor, all the Obligations and (ii) for each Assignor that is not a Specified RAI
Senior Notes Assignor, all the Obligations other than the New Senior Notes Obligations and the
Refinancing Senior Notes Obligations, provided that (x) the New Senior Notes Obligations
shall be excluded from the Applicable Obligations of a Specified RAI Senior Notes Assignor to the
extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured
pursuant to this Agreement and (y) the Refinancing Senior Notes Obligations shall be excluded from
the Applicable Obligations of a Specified RAI Senior Notes Assignor to the extent the Refinancing
Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured
pursuant to this Agreement.

          “Business Day” means any day excluding Saturday, Sunday and any day which shall be in
the City of New York a legal holiday or a day on which banking institutions are authorized by law
to close.

          “CA Termination Date” shall have the meaning provided in Section 10.9 hereof.

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          “Cash Collateral Account” shall mean a non-interest bearing cash collateral account
maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of
the Secured Creditors as their interests may appear.

          “Chattel Paper” shall mean “chattel paper” as such term is defined in the UCC.
Without limiting the foregoing, the term “Chattel Paper” shall in any event include all Tangible
Chattel Paper and all Electronic Chattel Paper.

          “Class” shall have the meaning provided in Section 10.2 hereof.

          “Collateral” shall have the meaning provided in Section 1.1(a) hereof.

          “Collateral Agent” shall have the meaning specified in the first paragraph of this
Agreement.

          “Collateral Proceeds” shall have the meaning provided in Section 7.4(a) hereof.

          “Commercial Tort Claims” shall mean “commercial tort claims” as such term is defined
in the UCC.

          “Contract Rights” shall mean all rights of any Assignor under each Contract,
including, without limitation, (i) any and all rights to receive and demand payments under any or
all Contracts and Excluded Contracts, (ii) any and all rights to receive and compel performance
under any or all Contracts and (iii) any and all other rights, interests and claims now existing or
in the future arising in connection with any or all Contracts.

          “Contracts” shall mean all contracts between an Assignor and one or more additional
parties (including, without limitation, any Secured Credit Card Agreement, any Secured Hedging
Agreement and related documents entered into in connection therewith) to the extent the grant by an
Assignor of a security interest pursuant to this Agreement in its right, title and interest in any
such contract is not prohibited by such contract (or, if prohibited, the consent of each other
party to such grant of a security interest is obtained) and would not give any other party to such
contract the right to terminate, or automatically result in the termination of, such other party’s
obligations thereunder or the Assignor’s rights thereunder (those contracts where such grant is so
prohibited (and consent not obtained) or resulting in such a right of, or automatic, termination
are referred to herein as “Excluded Contracts”).

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

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

          “Credit Card Issuer” shall have the meaning provided in the recitals of this
Agreement.

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          “Credit Card Obligations” shall have the meaning provided in the definition of
“Obligations” in this Article IX.

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

          “Deposit Accounts” shall mean all “deposit accounts” as such term is defined in the
UCC; provided that the term “Deposit Account” shall not include (i) any Excluded Escrow
Account and (ii) any Deposit Account (defined as provided above without regard to this proviso) of
Lane or Santa Fe.

          “Designated RAI Senior Notes Collateral” shall mean, with respect to any Specified RAI
Senior Notes Assignor, Collateral owned by such Specified RAI Senior Notes Assignor consisting of
(i) any Principal Property of such Specified RAI Senior Notes Assignor and (ii) all indebtedness
and other obligations owing by Reynolds Tobacco owned or held by such Specified RAI Senior Notes
Assignor.

          “Documents” shall mean “documents” as such term is defined in the UCC.

          “Electronic Chattel Paper” shall mean “electronic chattel paper” as such term is
defined in the UCC.

          “Equipment” shall mean any “equipment,” as such term is defined in the UCC, now or
hereafter owned by any Assignor and, in any event, shall include, but shall not be limited to, all
machinery, equipment, furnishings, fixtures now or hereafter owned by such Assignor and
any and all additions, substitutions and replacements of any of the foregoing and all
accessories hereto, wherever located, together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto but excluding Equipment to the extent it is
subject to a Permitted Lien and the terms of the Indebtedness securing such Permitted Liens
prohibits assignment or granting of a security interest in such Assignor’s rights and obligations
thereunder.

          “Event of Default” shall mean any Event of Default under the Credit Agreement, any
“event of default” under the New Senior Notes Documents or the Refinancing Senior Notes Documents
or any payment default, after any applicable grace period, under any Secured Credit Card Agreement
or any Secured Hedging Agreement.

          “Exchange Senior Notes” shall have the meaning provided in the Credit Agreement.

          “Excluded Contracts” shall have the meaning provided in the definition of Contracts.

          “Excluded Deposit Account” shall mean (i) the Cash Collateral Account, (ii) payroll
accounts, (iii) accounts used solely for disbursement purposes, (iv) up to ten certificates of
deposit established with various Lenders identified as “Excluded Deposit Accounts” and set forth
from time to time on Annex J hereto (provided that such certificates of deposit shall be
“Excluded Deposit Accounts” only so long as the aggregate amount of cash and

27

 

cash equivalents on
deposit in such accounts does not exceed $1,000,000 at any time) and (v) each Non-U.S. Deposit
Account.

          “Excluded Escrow Accounts” shall mean (i) the account maintained with the Bank of New
York in which cash has been deposited for the benefit of certain former shareholders of Nabisco
Group Holdings, (ii) escrow accounts which collateralize litigation appeal bonds or judgments being
appealed by an Assignor and (iii) escrow accounts created pursuant to the terms of the Master
Settlement Agreement; provided that, notwithstanding the foregoing, in the event that any
funds held in any escrow accounts described in clause (iii) of this definition are returned or
otherwise revert to the Borrower or its Subsidiaries, such funds shall automatically constitute
“Collateral” as defined in this Agreement.

          “Excluded Unperfected Collateral” shall mean and include (i) Excluded Deposit Accounts
(other than the Cash Collateral Account), (ii) any motor vehicles or similar titled property a
security interest over which may not be perfected by the filing of a UCC-1 financing statement in
the relevant jurisdiction, (iii) Patents, Trademarks and Copyrights acquired or issued after the
date of this Agreement during (and only during) the period from such date of acquisition or
issuance to and including the 15th day following the date of the required delivery of a
confirmatory grant of security interest therein pursuant to Section 4.6 or Section 5.6, as the case
may be, (iv) during the 60 day period prior to the required delivery of a “control agreement” with
respect to a Perfected Deposit Account pursuant to Section 3.9, the respective such Perfected
Deposit Account and (v) any Collateral acquired after the Fifth Restatement Effective Date (or, if
later, a given Trigger Date) during (and only during) the period from such date of acquisition
thereof to and including the 15th day following such acquisition.

          “General Intangibles” mean “general intangibles” as such term is defined in the UCC,
but excluding those General Intangibles constituting Excluded Contracts (other than any Receivable
or any money(ies) due or to become due under any such Excluded Contract).

          “Goods” shall mean “goods” as such term is defined in the UCC.

          “Health-Care-Insurance Receivable” shall mean any “health-care-insurance receivable”
as such term is defined in the UCC.

          “Hedging Creditors” shall have the meaning provided in the recitals of this Agreement.

          “Hedging Obligations” shall have the meaning provided in the definition of
“Obligations” in this Article IX.

          “Indemnitee” shall have the meaning provided in Section 8.1 hereof.

          “Initial New Senior Notes” shall mean, collectively, (i) the Borrower’s 7.25% Senior
Secured Notes due 2013 in an initial aggregate principal amount equal to $625,000,000, (ii) the
Borrower’s 7.625% Senior Secured Notes due 2016 in an initial aggregate principal amount equal to
$775,000,000, and (iii) the Borrower’s 7.75% Senior Secured Notes due 2018 in an initial aggregate
principal amount equal to $250,000,000, in each case issued pursuant to the New Senior Notes
Indenture, as in effect on the Fourth Restatement Effective Date and as the

28

 

same may be amended,
modified and/or supplemented from time to time in accordance with the terms thereof and the Credit
Agreement.

          “Instrument” shall mean “instrument” as such term is defined in the UCC;
provided that the term “Instrument” shall not include (x) any Instrument (as defined above
in the absence of this proviso) pledged pursuant to the Pledge Agreement or (y) the LSB Note (as
defined in the Pledge Agreement).

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

          “Investment Property” shall mean “investment property” as such term is defined in the
UCC, provided that the term “Investment Property” shall not include (i) Collateral (as
defined in the Pledge Agreement) pledged pursuant to the Pledge Agreement or (ii) “investment
property” excluded pursuant to the definition of “Investment Property” contained in the Pledge
Agreement.

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

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

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

          “Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such term is defined
in the UCC.

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

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

          “Marks” shall mean all right, title and interest in and to any United States or
foreign trademarks, service marks and trade names now held or hereafter acquired by any Assignor,
including any registration or application for registration of any trademarks and service marks now
held or hereafter acquired by an Assignor, which are registered in the United States Patent and
Trademark Office or the equivalent thereof in any State of the United States or in any foreign
country, as well as any unregistered marks used by any Assignor, and any trade dress

29

 

including
logos, designs, company names, business names, fictitious business names and other business
identifiers used by any Assignor in the United States or any foreign country.

          “Master Settlement Agreement” shall mean that certain master settlement agreement
entered into in November, 1998, between Reynolds Tobacco and 46 U.S. states and certain U.S.
territories and possessions with respect to health-care cost recovery actions brought by, or on
behalf of, the settling jurisdictions party thereto.

          “New Senior Notes” shall mean (i) the Initial New Senior Notes, (ii) the Exchange
Senior Notes and (iii) the Additional Senior Notes, in each case as the same may be amended,
modified and/or supplemented from time to time in accordance with the terms thereof and the Credit
Agreement.

          “New Senior Notes Creditors” shall mean the New Senior Notes Trustee and the holders
of the New Senior Notes.

          “New Senior Notes Documents” shall mean the New Senior Notes and the New Senior Notes
Indenture.

          “New Senior Notes Indenture” shall mean the Indenture, dated as of May 31, 2006, among
the Borrower, the Subsidiary Guarantors and The Bank of New York, as trustee, as in effect on the
Fifth Restatement Effective Date and as the same may be amended, modified and/or supplemented from
time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes Obligations” shall have the meaning provided in the definition of
“Obligations” in this Article IX.

          “New Senior Notes Trustee” shall mean the trustee under the New Senior Notes
Indenture.

          “Non-U.S. Deposit Account” has the meaning provided in Section 3.9(a).

          “Noticed Event of Default” shall mean (i) an Event of Default with respect to a Credit
Party under Section 9.05 of the Credit Agreement and (ii) any other Event of Default in respect of
which the Collateral Agent has given any Credit Agreement Party notice that such Event of Default
constitutes a “Noticed Event of Default.”

          “Notified Non-Credit Agreement Event of Default” means (i) the acceleration of the
maturity of any New Senior Notes or Refinancing Senior Notes or the failure to pay at maturity any
New Senior Notes or Refinancing Senior Notes, or the occurrence of any bankruptcy or insolvency
Event of Default under the New Senior Notes Indenture or the Refinancing Senior Notes Indenture,
(ii) any Event of Default under a Secured Credit Card Agreement or (iii) any Event of Default under
a Secured Hedging Agreement, in the case of any event described in clause (i), (ii) or (iii) to the
extent the New Senior Notes Trustee, the Refinancing Senior Notes Trustee, the relevant Credit Card
Issuer or the relevant Hedging Creditor, as the case may be, has given written notice to the
Collateral Agent that a “Notified Non-Credit Agreement Event of Default” exists; provided
that such written notice may only be

30

 

given if such Event of Default is continuing and, provided
further, that any such Notified Non-Credit Agreement Event of Default shall cease to exist (I)
once there is no longer any Event of Default under the New Senior Notes Indenture, the Refinancing
Senior Notes Indenture, the respective Secured Credit Card Agreement or the respective Secured
Hedging Agreement, as the case may be, in existence, (II) in the case of an Event of Default under
the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, after all New Senior
Notes Obligations or Refinancing Senior Notes Obligations, as the case may be, have been repaid in
full, (III) in the case of an Event of Default under a Secured Credit Card Agreement or Secured
Hedging Agreement, such Secured Credit Card Agreement or Secured Hedging Agreement, as the case may
be, has been terminated and all Credit Card Obligations or Hedging Obligations, as the case may be,
thereunder have been repaid in full, (IV) in the case of an Event of Default under the New Senior
Notes Indenture or the Refinancing Senior Notes Indenture, if the New Senior Notes Creditors or the
Refinancing Senior Notes Creditors, as the case may be, holding at least a majority of the
aggregate principal amount of the outstanding New Senior Notes or the Refinancing Senior Notes, as
the case may be, at such time have rescinded such written notice and (V) in the case of an Event of
Default under a Secured Credit Card Agreement or Secured Hedging Agreement, the requisite Credit
Card Issuers with Credit Card Obligations or Hedging Creditors with Hedging Obligations, as the
case may be, thereunder at such time have rescinded such written notice.

          “Obligations” shall mean (i) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations (including obligations which, but for
the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
of each Assignor, now existing or hereafter incurred under, arising out of or in
connection with each Credit Document to which it is a party (including, without limitation,
indemnities, fees and interest (including all interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar
proceeding of the Borrower or any other Credit Party at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed in any such
proceeding)) and the due performance and compliance by each Assignor with the terms of each such
Credit Document (all such obligations and liabilities under this clause (i), except to the extent
consisting of obligations or indebtedness with respect to Secured Hedging Agreements, being herein
collectively called the “Credit Document Obligations”); (ii) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due) and liabilities of each Assignor, now existing or hereafter incurred under,
arising out of or in connection with each Secured Credit Card Agreement, including all obligations,
if any, under a Guaranty in respect of any Secured Credit Card Agreement and all interest that
accrues after the commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the
rate provided for in the respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding (all such obligations and indebtedness under this clause
(ii) being herein collectively called the “Credit Card Obligations”); (iii) the full and
prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of each Assignor, now existing or hereafter
incurred under, arising out of or in connection with

31

 

each Secured Hedging Agreement, including all
obligations, if any, under a Guaranty in respect of any Secured Hedging Agreement and all interest
that accrues after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit
Party at the rate provided for in the respective documentation, whether or not a claim for
post-petition interest is allowed in any such proceeding (all such obligations and indebtedness
under this clause (iii) being herein collectively called the “Hedging Obligations”); (iv)
the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities of each Assignor, now existing or hereafter
incurred under, arising out of or in connection with each New Senior Notes Document to which it is
a party (including all interest that accrues after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the
Borrower or any other Credit Party at the rate provided for in the respective documentation,
whether or not a claim for post-petition interest is allowed in any such proceeding) and the due
performance and compliance by each Assignor with the terms of each such New Senior Notes Document
(all such obligations and liabilities under this clause (iv) being herein collectively called the
“New Senior Notes Obligations”); (v) the full and prompt payment when due (whether at
stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities of each Assignor, now existing or hereafter incurred under, arising out of or in
connection with each Refinancing Senior Notes Document to which it is a party (including all
interest that accrues after the commencement of any case, proceeding or other action relating to
the bankruptcy,
insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at
the rate provided for in the respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding) and the due performance and compliance by each Assignor
with the terms of each such Refinancing Senior Notes Document (all such obligations and liabilities
under this clause (v), being herein collectively called the “Refinancing Senior Notes
Obligations”); (vi) any and all sums advanced by the Collateral Agent or Pledgee in order to
preserve the Collateral or preserve its security interest in the Collateral; (vii) in the event of
any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities
of each Assignor referred to in clauses (i), (ii), (iii), (iv), (v) and (vi), after an Event of
Default shall have occurred and be continuing, the reasonable expenses of re-taking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or
of any exercise by the Collateral Agent or Pledgee of its rights hereunder, together with
reasonable attorneys’ fees and court costs; and (viii) all amounts paid by any Indemnitee as to
which such Indemnitee has the right to reimbursement under Section 8.1 hereof.

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

          “Perfected Deposit Account” shall mean, as to any Assignor, each Deposit Account of
such Assignor other than an Excluded Deposit Account.

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

          “Permitted Lien” shall mean the Liens permitted to be outstanding under Section 8.03
of the Credit Agreement (or, after the CA Termination Date, the Credit Agreement as in effect
immediately prior to the occurrence of the CA Termination Date).

          “Principal Property” shall have the meaning provided in the New Senior Notes Indenture
or the Refinancing Senior Notes Indenture (in each case as in effect on the date hereof), as the
context may require.

          “Proceeds” shall have the meaning assigned that term under the UCC on the date hereof
or under other relevant law and, in any event, shall include, but not be limited to, (i) any and
all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or
an Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in
any form whatsoever) made or due and payable to an Assignor from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of governmental
authority) and (iii) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.

          “Pro Rata Share” shall have the meaning provided in Section 7.4(b) of this Agreement.

          “RAI Senior Notes Obligations” shall mean, collectively, the New Senior Notes
Obligations and the Refinancing Senior Notes Obligations.

          “Receivable” shall mean any “account” as such term is defined in the UCC, and in any
event shall include but shall not be limited to, all rights to payment of any monetary obligation,
whether or not earned by performance, (i) for property that has been or is to be sold, leased,
licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii)
for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be
incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a
charter or other contract, (vii) arising out of the use of a credit or charge card or information
contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to
operate the game by a State or governmental unit of a State. Without limiting the foregoing, the
term “account” shall include all Health-Care-Insurance Receivables.

          “Refinancing Senior Notes” shall have the meaning provided in the Credit Agreement.

          “Refinancing Senior Notes Creditors” shall mean the Refinancing Senior Notes Trustee
and the holders of the Refinancing Senior Notes.

          “Refinancing Senior Notes Documents” shall mean, collectively, the Refinancing Senior
Notes and the Refinancing Senior Notes Indenture.

33

 

          “Refinancing Senior Notes Indenture” shall mean one or more indentures entered into
from time to time providing for the issuance of Refinancing Senior Notes by the Borrower, in each
case as the same may be amended, modified and/or supplemented from time to time in accordance with
the terms thereof and the Credit Agreement.

          “Refinancing Senior Notes Obligations” shall have the meaning provided in the
definition of “Obligations” in this Article IX.

          “Refinancing Senior Notes Trustee” shall mean, collectively, the trustee and/or
trustees under the Refinancing Senior Notes Indenture.

          “Registered Organization” shall have the meaning provided in the UCC.

          “Requisite Creditors” shall have the meaning provided in Section 10.2 hereof.

          “Restricted Assignor” shall mean Lane and Santa Fe.

          “RJRTH” shall mean R.J. Reynolds Tobacco Holdings, Inc., a Wholly Owned Subsidiary of
the Borrower.

          “Secured Credit Card Agreement” shall have the meaning provided in the recitals of
this Agreement.

          “Secured Creditors” shall mean, collectively, the Lender Secured Creditors, the the
New Senior Notes Creditors and the Refinancing Senior Notes Creditors.

          “Secured Debt Agreements” shall mean each Credit Document, each Secured Credit Card
Agreement, each Secured Hedging Agreement, each New Senior Notes Document and each Refinancing
Senior Notes Document.

          “Secured Hedging Agreements” shall have the meaning provided in the recitals of this
Agreement.

          “Security” shall mean “security” as such term is defined in the UCC.

          “Software” shall mean “software” as such term is defined in the UCC.

          “Specified RAI Senior Notes Assignor” shall mean the Borrower and each Assignor with
RAI Senior Notes Obligations that is a Restricted Subsidiary (as defined in the New Senior Notes
Indenture).

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

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          “Tangible Chattel Paper” shall mean “tangible chattel paper” as such term is defined
in the UCC.

          “Termination Date” shall have the meaning provided in Section 10.9 hereof.

          “Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is used in the UCC.

          “Trade Secret Rights” shall mean the rights of an Assignor in any Trade Secret it
holds.

          “Trade Secrets” means any secretly held existing engineering and other data,
information, production procedures and other know-how relating to the design, manufacture,
assembly, installation, use, operation, marketing, sale and servicing of any products or business
of an Assignor worldwide whether written or not written.

          “UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in the
State of New York.

          “Unrestricted Assignor” shall mean each Assignor other than a Restricted Assignor.

ARTICLE X

MISCELLANEOUS

          10.1 Notices. All notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered (including by way of overnight courier):

     (i) if to any Assignor, at its address contained in the Credit Agreement (for the
Credit Agreement Parties) or the Subsidiary Guaranty (for the other Assignors);

     (ii) if to the Collateral Agent, at:

JPMorgan Chase Bank, N.A.

4 New York Plaza, 4th Floor

New York, New York 10004

Attention: Raju Nanoo

Tel: 212-623-7537

Fax: 212-623-1310

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

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     (iv) if to any Credit Card Issuer, at such address as such Credit Card Issuer shall
have specified in writing to the Assignors and the Collateral Agent;

     (v) if to any Hedging Creditor, at such address as such Hedging Creditor shall have
specified in writing to the Assignors and the Collateral Agent;

     (vi) if to any New Senior Notes Creditor, at such address of the New Senior Notes
Trustee as the New Senior Notes Trustee shall have specified in writing to the Assignors and
the Collateral Agent;

     (vii) if to any Refinancing Senior Notes Creditor, at such address of the Refinancing
Senior Notes Trustee as the Refinancing Senior Notes Trustee shall have specified in writing
to the Assignors and the Collateral Agent;

or at such other address as shall have been furnished in writing by any Person described above to
the party required to give notice hereunder. Except as otherwise expressly provided herein, all
such notices and communications shall be deemed to have been duly given or made when received.

          10.2 Waiver; Amendment. (a) None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the
Collateral Agent (with the
consent of (x) if prior to the CA Termination Date, the Required Lenders or, to the extent required
by Section 12.12 of the Credit Agreement, all of the Lenders and (y) if on or after the CA
Termination Date, the holders of a majority of the outstanding principal amount of the Obligations
remaining outstanding) and each Assignor affected thereby (it being understood that the addition or
release of any Assignor hereunder shall not constitute a change, waiver, modification or variance
affecting any Assignor other than the Borrower and the Assignor so added or released),
provided that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar
manner) shall require the written consent of the Requisite Creditors of such Class of Secured
Creditors; provided, however, that technical modifications may be made to this
Agreement without the consent of a given Class of Secured Creditors affected thereby if such
modifications are intended to conform the Collateral pledge requirements of this Agreement with the
pledge requirements of the relevant Secured Debt Agreements to which such Class of Secured
Creditors is a party. For the purpose of this Agreement, the term “Class” shall mean each
class of Secured Creditors, i.e., whether (1) the Lender Creditors as holders of the Credit
Document Obligations, (2) the Credit Card Issuers as holders of the Credit Card Obligations, (3)
the Hedging Creditors as holders of the Hedging Obligations, (4) the New Senior Notes Creditors as
holders of the New Senior Notes Obligations or (5) the Refinancing Senior Notes Creditors as
holders of the Refinancing Senior Notes Obligations. For the purpose of this Agreement, the term
“Requisite Creditors” of any Class shall mean each of (1) with respect to each of the
Credit Document Obligations, the Required Lenders, (2) with respect to the Credit Card Obligations,
the holders of at least a majority of all Credit Card Obligations outstanding from time to time,
(3) with respect to the Hedging Obligations, the holders of at least a majority of all Hedging
Obligations outstanding from time to time, (4) with respect to the New Senior Notes Obligations,
the holders of at least a majority of the outstanding principal amount of the New Senior Notes and
(5) with respect to the

36

 

Refinancing Senior Notes Obligations, the holders of at least a majority of
the outstanding principal amount of the Refinancing Senior Notes.

          (b) No delay on the part of the Collateral Agent in exercising any of its rights, remedies,
powers and privileges hereunder or partial or single exercise thereof, shall constitute a waiver
thereof. No notice to or demand on any Assignor shall constitute a waiver of any of the rights of
the Collateral Agent to any other or further action without notice or demand to the extent such
action is permitted to be taken by the Collateral Agent without notice or demand under the terms of
this Agreement.

          10.3 Obligations Absolute. The obligations of each Assignor hereunder shall remain in full
force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or the like of any Assignor;
(b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or
in respect of this Agreement, any other Credit Document or any other Secured Debt Agreement, except
as specifically set forth in a waiver granted pursuant to Section 10.2 hereof; or (c) any amendment
to or modification of any other Credit Document or any other Secured Debt Agreement or any security
for any of the Obligations; whether or not any Assignor shall have notice or knowledge of any of
the foregoing. The rights and remedies of the Collateral Agent herein provided are
cumulative and not exclusive of any rights or remedies which the Collateral Agent would otherwise
have.

          10.4 Successors and Assigns. This Agreement shall be binding upon each Assignor and its
successors and assigns and shall inure to the benefit of the Collateral Agent and its successors
and assigns. All agreements, statements, representations and warranties made by such Assignor
herein or in any certificate or other instrument delivered by each Assignor or on its behalf under
this Agreement shall be considered to have been relied upon by the Secured Creditors and shall
survive the execution and delivery of this Agreement, the other Credit Documents and the other
Secured Debt Agreements, regardless of any investigation made by the Secured Creditors on their
behalf.

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

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

          10.7 Governing Law. This Agreement and the rights and obligations of the parties hereunder
shall be construed in accordance with and governed by the law of the State of New York.

          10.8 Assignors’ Duties. It is expressly agreed, anything herein contained to the contrary
notwithstanding, that each Assignor shall remain liable to perform all of the obligations,

37

 

if any,
assumed by it with respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or arising out of this
Agreement, except any obligations or liabilities which are the direct result of the Collateral
Agent’s gross negligence or willful misconduct, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral.

          10.9 Termination; Release. (a) After the Termination Date (as defined below), this
Agreement shall terminate (provided that all indemnities set forth herein including,
without limitation, in Article VIII hereof shall survive any such termination) and the Collateral
Agent, at the request and expense of the respective Assignor, will execute and deliver to such
Assignor a proper instrument or instruments acknowledging the satisfaction and termination of this
Agreement as provided above, and will duly assign, transfer and deliver to such Assignor (without
recourse and without
any representation or warranty) such of the Collateral as may be in the possession of the
Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to
this Agreement, together with any moneys at the time held by the Collateral Agent hereunder. As
used in this Agreement, (i) “CA Termination Date” shall mean the date upon which the Total
Commitment has been terminated, no Letter of Credit or Note under the Credit Agreement is
outstanding and all other Credit Document Obligations have been paid in full in cash (other than
arising from indemnities for which no request for payment has been made) and (ii) “Termination
Date” shall mean the date upon which (x) the CA Termination Date shall have occurred and (y) if
(but only if) a Notified Non-Credit Agreement Event of Default shall have occurred and be
continuing on the CA Termination Date (and after giving effect thereto), either (I) such Notified
Non-Credit Agreement Event of Default shall have been cured or waived by the requisite holders of
the relevant Obligations subject to such Notified Non-Credit Agreement Event of Default or (II) all
Secured Credit Card Agreements and Secured Hedging Agreements (if any) giving rise to a Notified
Non-Credit Agreement Event of Default shall have been terminated and all Obligations subject to
such Notified Non-Credit Agreement Event of Default shall have been paid in full (other than
arising from indemnities for which no request for payment has been made).

          (b) So long as no Notified Non-Credit Agreement Event of Default has occurred and is
continuing, in the event that (x) prior to the CA Termination Date, (i) any part of the Collateral
is sold or otherwise disposed of in connection with a sale or other disposition permitted by
Section 8.02 of the Credit Agreement (it being agreed for such purposes that a release will be
deemed “permitted by Section 8.02 of the Credit Agreement” if the proposed transaction constitutes
an exception to Section 8.02 of the Credit Agreement) or (ii) all or any part of the Collateral is
released at the direction of the Required Lenders (or all the Lenders if required by Section 12.12
of the Credit Agreement), and the proceeds of such sale or disposition or from such release (if
any) are applied in accordance with the terms of the Credit Agreement to the extent required to be
so applied or (y) on and after the CA Termination Date, any part of the Collateral is sold or
otherwise disposed of without violating the New Senior Notes Documents, the Refinancing Senior
Notes Documents, the Secured Credit Card Agreements and the Secured Hedging Agreements, the
Collateral Agent, at the request and expense of the respective Assignor will release such
Collateral from this Agreement, duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as is then being (or
has been) so sold or released and as may be in possession of the Collateral

38

 

Agent and has not
theretofore been released pursuant to this Agreement (it being understood and agreed that upon the
release of all or any portion of the Collateral by the Collateral Agent at the direction of the
Lenders as provided above, the Lien on the Collateral in favor of the Credit Card Issuers, the
Hedging Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors shall
automatically be released).

          (c) In addition to the foregoing, all Collateral shall be automatically released (subject to
reinstatement upon the occurrence of a new Trigger Event) in accordance with Section 7.10(i) of the
Credit Agreement.

          (d) At any time that the relevant Assignor desires that the Collateral Agent take any action
to give effect to any release of Collateral pursuant to the foregoing Section 10.9(a), (b) or (c),
it shall deliver to the Collateral Agent a certificate signed by an authorized officer
describing the Collateral to be released and certifying its entitlement to a release pursuant
to the applicable provisions of Sections 10.9(a), (b) or (c) and in such case the Collateral Agent,
at the request and expense of such Assignor, will execute such documents as required to duly
release such Collateral and to assign, transfer and deliver to such Assignor or its designee
(without recourse and without any representation or warranty) such of the Collateral as is then
being released and as may be in the possession of the Collateral Agent. The Collateral Agent shall
have no liability whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by (or which the Collateral Agent in good faith believes to be permitted by) this
Section 10.9. Upon any release of Collateral pursuant to Section 10.9(a), (b) or (c), so long as
no Noticed Event of Default is then in existence, none of the Secured Creditors shall have any
continuing right or interest in such Collateral, or the proceeds thereof (subject to reinstatement
rights upon the occurrence of a new Trigger Event in the case of a release pursuant to Section
10.9(c)).

          10.10 Collateral Agent. The Collateral Agent will hold in accordance with this Agreement
all items of the Collateral at any time received under this Agreement. By accepting the benefits
of this Agreement, each Secured Creditor acknowledges and agrees that the obligations of the
Collateral Agent as holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this
Agreement and Annex M hereto. The Collateral Agent shall act hereunder on the terms and conditions
set forth in Section 11 of the Credit Agreement and in Annex M hereto, the terms of which shall be
deemed incorporated herein by reference as fully as if the same were set forth herein in their
entirety. In the event that any provision set forth in Section 11 of the Credit Agreement in
respect of the Collateral Agent conflicts with any provision set forth in Annex M hereto, the
provisions of Annex M hereto shall govern (except that the Lenders shall remain obligated to
indemnify the Collateral Agent pursuant to Section 11 of the Credit Agreement, to the extent the
Collateral Agent is not indemnified by Secured Creditors pursuant to Annex M). Notwithstanding
anything to the contrary contained in Section 10.2 of this Agreement, this Section 10.10, and the
duties and obligations of the Collateral Agent set forth in this Section 10.10, may not be amended
or modified without the consent of the Collateral Agent.

          10.11 Counterparts. This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the

39

 

same instrument. A
set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the
Collateral Agent.

          10.12 Additional Assignors. It is understood and agreed that any Subsidiary of the
Borrower that is required to become a party to this Agreement after the date hereof pursuant to the
requirements of the Credit Agreement shall become an Assignor hereunder by (x) executing a
counterpart hereof and/or an assumption agreement in form and substance satisfactory to the
Collateral Agent, (y) delivering
supplements to Annexes A through F hereto and Annexes I, J and K hereto, as are necessary to cause
such Annexes to be complete and accurate with respect to such additional Assignor on such date and
(z) taking all actions as specified in this Agreement and the Credit Agreement, in each case with
all documents required above to be delivered to the Collateral Agent and with all documents and
action required above to be taken to the reasonable satisfaction of the Collateral Agent.

          10.13 No Third Party Beneficiaries. This Agreement is entered into solely for the benefit
of the parties hereto and their respective successors and assigns and for the benefit of the
Secured Creditors from time to time and their respective successors and assigns and, except for the
Secured Creditors and their successors and assigns, there shall be no third party beneficiaries
hereof, nor shall any Person other than the parties hereto and their respective successors and
assigns, and the Secured Creditors and their respective successors and assigns, be entitled to
enforce the provisions hereof or have any claims against any party hereto (or any Secured Creditor)
or their successors and assigns arising from, or under, this Agreement.

          10.14 Amendment and Restatement. Each of the Collateral Agent and each of the
Assignors hereby acknowledges and agrees that from and after the Fifth Restatement Effective Date,
this Agreement amends, restates and supersedes the Second Amended and Restated Security Agreement
in its entirety.

* * *

40

 

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

	 	 	 	 	 
	 	REYNOLDS AMERICAN INC.,

  as an Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Senior Vice President and Treasurer 	 
	 
	 	R.J. REYNOLDS TOBACCO HOLDINGS, INC., as an

  Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Senior Vice President and Treasurer 	 
	 
	 	R. J. REYNOLDS TOBACCO COMPANY,

  as an Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Treasurer 	 
	 
	 	RJR ACQUISITION CORP., as an Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Assistant Treasurer 	 
	 
	 	GMB, INC., as an Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Treasurer 	 
	 

Signature Page to Security Agreement

 

 

	 	 	 	 	 
	 	FHS, INC., as an Assignor

 	 
	 	By:  	/s/ Vernon A. Stewart
 	 
	 	 	Name:  	Vernon A. Stewart 	 
	 	 	Title:  	Vice President 	 
	 
	 	R. J. REYNOLDS TOBACCO CO.,

  as an Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	CONWOOD COMPANY, LLC,

  as an Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	CONWOOD SALES CO., LLC,

  as an Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	ROSSWIL LLC, as an Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	CONWOOD HOLDINGS, INC.,

  as an Assignor

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

Signature Page to Security Agreement

 

 

	 	 	 	 	 
	 	SANTA FE NATURAL TOBACCO COMPANY, INC., 

  as an Assignor,
 	 
	 
	 	By:  	/s/ Richard M. Sanders
 	 
	 	 	Name:  	Richard M. Sanders 	 
	 	 	Title:  	President and CEO 	 
	 
	 	LANE, LIMITED, as an Assignor,

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Assistant Treasurer 	 
	 
	 	SCOTT TOBACCO LLC,

  as an Assignor,

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	RJR PACKAGING, LLC,

  as an Assignor,

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	R. J. REYNOLDS GLOBAL PRODUCTS, INC.,

  as an Assignor,

 	 
	 	By:  	/s/ Daniel A. Fawley
 	 
	 	 	Name:  	Daniel A. Fawley 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

Signature Page to Security Agreement

 

 

	 	 	 	 	 
	 	Acknowledged And Agreed:

JPMORGAN CHASE BANK, N.A.,

  as Collateral Agent and Assignee

 	 
	 	By:  	/s/ Thomas T. Hou
 	 
	 	 	Name:  	Thomas T. Hou 	 
	 	 	Title:  	Executive Director 	 
	 

Signature Page to Security Agreement

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I
	 	SECURITY INTERESTS	 	 	3	 
	1.1
	 	Grant of Security Interests	 	 	3	 
	1.2
	 	Power of Attorney	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS	 	 	5	 
	2.1
	 	Necessary Filings	 	 	5	 
	2.2
	 	No Liens	 	 	6	 
	2.3
	 	Other Financing Statements	 	 	6	 
	2.4
	 	Chief Executive Office; Records	 	 	6	 
	2.5
	 	Location of Inventory and Equipment	 	 	7	 
	2.6
	 	Legal Names; Organizational Identification Number; Trade Names; Change of Name; etc	 	 	7	 
	2.7
	 	Recourse	 	 	7	 
	2.8
	 	Jurisdiction and Type of Organization	 	 	7	 
	2.9
	 	Collateral in the Possession of a Bailee	 	 	8	 
	2.10
	 	As-Extracted Collateral; Timber-to-be-Cut	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS	 	 	8	 
	3.1
	 	Additional Representations and Warranties	 	 	8	 
	3.2
	 	Maintenance of Records	 	 	8	 
	3.3
	 	Modification of Terms; etc	 	 	9	 
	3.4
	 	Collection	 	 	9	 
	3.5
	 	Direction to Account Debtors; etc	 	 	9	 
	3.6
	 	Instruments	 	 	10	 
	3.7
	 	Further Actions	 	 	10	 
	3.8
	 	Assignors Remain Liable Under Receivables and Contracts	 	 	10	 
	3.9
	 	Deposit Accounts; Etc	 	 	10	 
	3.10
	 	Letter-of-Credit Rights	 	 	11	 
	3.11
	 	Commercial Tort Claims	 	 	12	 
	3.12
	 	Chattel Paper	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 	SPECIAL PROVISIONS CONCERNING TRADEMARKS	 	 	12	 
	4.1
	 	Additional Representations and Warranties	 	 	12	 
	4.2
	 	Licenses and Assignments	 	 	13	 
	4.3
	 	Infringements	 	 	13	 
	4.4
	 	Preservation of Marks	 	 	13	 
	4.5
	 	Maintenance of Registration	 	 	13	 
	4.6
	 	Future Registered Marks	 	 	14	 
	4.7
	 	Remedies	 	 	14	 

(i) 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE V
	 	SPECIAL PROVISIONS CONCERNING TRADE SECRET RIGHTS, PATENTS AND COPYRIGHTS	 	 	14	 
	5.1
	 	Additional Representations and Warranties	 	 	14	 
	5.2
	 	Licenses and Assignments	 	 	15	 
	5.3
	 	Infringements	 	 	15	 
	5.4
	 	Maintenance of Patents or Copyrights	 	 	16	 
	5.5
	 	Prosecution of Patent or Copyright Application	 	 	16	 
	5.6
	 	Other Patents and Copyrights	 	 	16	 
	5.7
	 	Remedies	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 	PROVISIONS CONCERNING ALL COLLATERAL	 	 	17	 
	6.1
	 	Protection of Collateral Agent’s Security	 	 	17	 
	6.2
	 	Further Actions	 	 	17	 
	6.3
	 	Financing Statements	 	 	17	 
	6.4
	 	Additional Information	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE VII
	 	REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT	 	 	18	 
	7.1
	 	Remedies; Obtaining the Collateral Upon Default	 	 	18	 
	7.2
	 	Remedies; Disposition of the Collateral	 	 	20	 
	7.3
	 	Waiver of Claims	 	 	21	 
	7.4
	 	Application of Proceeds	 	 	21	 
	7.5
	 	Remedies Cumulative	 	 	23	 
	7.6
	 	Discontinuance of Proceedings	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 	INDEMNITY	 	 	23	 
	8.1
	 	Indemnity	 	 	23	 
	8.2
	 	Indemnity Obligations Secured by Collateral; Survival	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE IX
	 	DEFINITIONS	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE X
	 	MISCELLANEOUS	 	 	35	 
	10.1
	 	Notices	 	 	35	 
	10.2
	 	Waiver; Amendment	 	 	36	 
	10.3
	 	Obligations Absolute	 	 	37	 
	10.4
	 	Successors and Assigns	 	 	37	 
	10.5
	 	Headings Descriptive	 	 	37	 
	10.6
	 	Severability	 	 	37	 
	10.7
	 	Governing Law	 	 	37	 
	10.8
	 	Assignors’ Duties	 	 	37	 
	10.9
	 	Termination; Release	 	 	38	 
	10.10
	 	Collateral Agent	 	 	39	 
	10.11
	 	Counterparts	 	 	39	 
	10.12
	 	Additional Assignors	 	 	40	 
	10.13
	 	No Third Party Beneficiaries	 	 	40	 
	10.14
	 	Amendment and Restatement	 	 	40	 
	 
	SCHEDULE OF CHIEF EXECUTIVE OFFICES; RECORD LOCATIONS	 	 	1	 

(ii) 

 

	 	 	 
	ANNEX A

	 	Schedule of Chief Executive Offices; Record Locations
	ANNEX B

	 	Schedule of Equipment and Inventory Locations
	ANNEX C

	 	Schedule of Legal Names, Trade and Fictitious Names, Etc.
	ANNEX D

	 	Schedule of Marks and Applications
	ANNEX E

	 	Schedule of Patents and Patent Applications
	ANNEX F

	 	Schedule of Copyrights and Copyright Applications
	ANNEX G

	 	Assignment of Security Interest in United States Patents
and Trademarks
	ANNEX H

	 	Assignment of Security Interest in United States Copyrights
	ANNEX I

	 	Schedule of Type of Organization and Jurisdiction of Organization
	ANNEX J

	 	Schedule of Deposit Accounts
	ANNEX K

	 	Description of Commercial Tort Claims
	ANNEX L

	 	Form of Control Agreement Regarding Deposit Accounts
	ANNEX M

	 	Collateral Agent

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