Document:

Exhibit 10.2 to Tennant Company Form 8-K dated March 4, 2009

Exhibit 10.2  

EXECUTION COPY  

PLEDGE AND SECURITY AGREEMENT

          THIS
PLEDGE AND SECURITY AGREEMENT (as the same may be amended, restated,
supplemented or otherwise modified from time to time, this “Security
Agreement”) is entered into as of March 4, 2009 by and among TENNANT
COMPANY, a Minnesota corporation (the “Company”), the Subsidiaries of
the Company listed on the signature pages hereto (together with the Company,
the “Initial Grantors,” and together with any additional Subsidiaries,
whether now existing or hereafter formed or acquired which become parties to
this Security Agreement from time to time, in accordance with the terms of the
Credit Agreement (as defined below) or, upon the effectiveness thereof, the
Note Agreement (as defined in the Intercreditor Agreement), if any, by
executing a Supplement hereto in substantially the form of Annex I, the
“Grantors”), and JPMORGAN CHASE BANK, N.A., a national banking
association, in its capacity as contractual representative (the “Collateral
Agent”) for itself and for the Secured Parties (as defined in the Credit
Agreement identified below).

PRELIMINARY
STATEMENT

          The
Company, certain Subsidiaries of the Company from time to time parties thereto
as borrowers (together with the Company, the “Borrowers”), the financial
institutions from time to time party thereto as lenders (collectively, the “Lenders”),
and JPMorgan Chase Bank, N.A., as administrative agent thereunder (the “Administrative
Agent”), have entered into that certain Credit Agreement dated as of June
19, 2007 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), which Credit
Agreement provides, subject to the terms and conditions thereof, for extensions
of credit and other financial accommodations to be made by the Lenders to or
for the benefit of the Borrowers.

          The
Grantors wish to secure their obligations to the Secured Parties pursuant to
the terms of this Security Agreement.

          ACCORDINGLY,
the Grantors and the Collateral Agent, on behalf of the Secured Parties, hereby
agree as follows:

ARTICLE I

DEFINITIONS

          1.1.    Terms
Defined in the
Credit Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit
Agreement.

          1.2.    Terms
Defined in UCC.
Terms defined in the UCC which are
not otherwise defined in this Security Agreement are used herein as defined in
the UCC.

          1.3.    Definitions of Certain Terms Used Herein.
As used in this Security Agreement, in addition to the terms defined in the Preliminary
Statement, the following terms shall have the following meanings:

          “Accounts”
shall have the meaning set forth in Article 9 of the UCC.

          “Article”
means a numbered article of this Security Agreement, unless another document is
specifically referenced.

          “Chattel
Paper” shall have the meaning set forth in Article 9 of the UCC.

          “Collateral”
means all Accounts, Chattel Paper, Commercial Tort Claims, Copyrights, Deposit
Accounts, Documents, Equipment, Farm Products, General Intangibles, Goods,
Instruments, Inventory, Investment Property, letters of credit,
Letter-of-Credit Rights, Licenses, Patents, Pledged Deposits, Supporting
Obligations, Trademarks and Other Collateral, wherever located, in which any
Grantor now has or hereafter acquires any right or interest, and the proceeds
(including Stock Rights), insurance proceeds and products thereof, together
with all books and records, customer lists, credit files, computer files,
programs, printouts and other computer materials and records related thereto; provided
however that “Collateral” shall not include Excluded Assets.

          “Commercial
Tort Claims” means those certain currently existing commercial tort claims,
as defined in the UCC of any Grantor, including each commercial tort claim
specifically described in Exhibit “F”. 

          “Control”
shall have the meaning set forth in Article 8 or, if applicable, in Section
9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

          “Copyrights”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all copyrights, rights and interests in
copyrights, works protectable by copyright, copyright registrations, and
copyright applications; (b) all extensions of any of the foregoing; (c) all
income, royalties, damages, and payments now or hereafter due and/or payable
under any of the foregoing, including, without limitation, damages or payments
for past or future infringements for any of the foregoing; (d) the right to sue
for past, present, and future infringements of any of the foregoing; and (e)
all rights corresponding to any of the foregoing throughout the world.

          “Default”
means an event described in Section 5.1 hereof.

          “Deposit
Accounts” shall have the meaning set forth in Article 9 of the UCC.

          “Documents”
shall have the meaning set forth in Article 9 of the UCC.

          “Equipment”
shall have the meaning set forth in Article 9 of the UCC.

          “Excluded
Assets” means (i) motor vehicles and other assets subject to certificates
of title; (ii) any equipment, lease, license, contract, instrument or agreement
to which any Grantor is a party, if and so long as the pledge of, or grant of a
security interest in, such property would result in (A) a breach of applicable
law or (B) a breach, termination or default under the terms of such lease,
license, contract, instrument or agreement or any agreement to which such equipment
is subject (other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC);
(iii) assets to the extent a security interest in such assets would result in a
Deemed Dividend Problem or a Financial Assistance Problem; (iv) assets
consisting of real property or interests in real property; (v) fixtures; (vi)
assets of the Company or any Domestic Subsidiary located in Australia or Japan;
(vii) those assets as to which the Collateral Agent, by notice to the Company,
reasonably determines that the burden or cost of obtaining such a security
interest, pledge or perfection thereof outweighs the benefit to the Secured
Parties of the security to be afforded thereby; and (viii) any lease of 

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equipment by a Grantor
and equipment subject thereto which are conveyed to a third party in connection
with the financing of such lease and equipment, to the extent such Indebtedness
and any Lien on such lease and/or equipment is otherwise permitted under
Sections 6.01 and 6.02 of the Credit Agreement and the comparable provisions of
the Note Agreement.

          “Exhibit”
refers to a specific exhibit to this Security Agreement, unless another
document is specifically referenced.

          “Farm
Products” shall have the meaning set forth in Article 9 of the UCC.

          “General
Intangibles” shall have the meaning set forth in Article 9 of the UCC and,
in any event, includes payment intangibles, contract rights, rights to payment,
rights arising under common law, statutes, or regulations, choses or things in
action, goodwill (including the goodwill associated with any Trademark),
Patents, Trademarks, Copyrights, URLs and domain names, Industrial Designs,
other industrial or Intellectual Property or rights therein or applications
therefor, whether under license or otherwise, programs, programming materials,
blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, including Intellectual Property
Licenses, infringement claims, computer programs, information contained on
computer disks or tapes, software, literature, reports, catalogs, pension plan
refunds, pension plan refund claims, insurance premium rebates, tax refunds,
and tax refund claims, interests in a partnership or limited liability company
which do not constitute a security under Article 8 of the Code, and any other
personal property other than Commercial Tort Claims, money, Accounts, Chattel
Paper, Deposit Accounts, Goods, Investment Property, negotiable Collateral, and
oil, gas, or other minerals before extraction. 

          “Goods”
shall have the meaning set forth in Article 9 of the UCC.

          “Industrial
Designs” means (i) registered industrial designs and industrial design
applications, and also includes registered industrial designs and industrial
design applications listed in Exhibit “B”, (ii) all renewals, divisions
and any industrial design registrations issuing thereon and any and all foreign
applications corresponding thereto, (iii) all income, royalties, damages and
payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and
damages and payments for past or future infringements thereof, (iv) the right
to sue for past, present and future infringements thereof, and (v) all of each
Grantor’s rights corresponding thereto throughout the world.

          “Instruments”
shall have the meaning set forth in Article 9 of the UCC.

          “Intellectual
Property” means all Patents, Trademarks, Copyrights and any other
intellectual property.

          “Inventory”
shall have the meaning set forth in Article 9 of the UCC.

          “Investment
Property” shall have the meaning set forth in Article 9 of the UCC.

          “Letter
of Credit Rights” shall have the meaning set forth in Article 9 of the UCC.

          “Licenses”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to (a) any and all licensing agreements or similar arrangements
in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties,
damages, claims, and payments now or hereafter due or payable 

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under and with respect
thereto, including, without limitation, damages and payments for past and
future breaches thereof, and (c) all rights to sue for past, present, and
future breaches thereof.

          “Other
Collateral” means any property of the Grantors, not included within the
defined terms Accounts, Chattel Paper, Commercial Tort Claims, Copyrights,
Deposit Accounts, Documents, Equipment, Farm Products, General Intangibles,
Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights,
Licenses, Patents, Pledged Deposits, Supporting Obligations and Trademarks,
including, without limitation, all cash on hand, Stock Rights or any other
deposits (general or special, time or demand, provisional or final) with any
bank or other financial institution, it being intended that the Collateral
include all personal property of the Grantors other than Excluded Assets.

          “Patents”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to: (a) any and all patents and patent applications; (b) all
inventions and improvements described and claimed therein; (c) all reissues,
divisions, continuations, extensions, and continuations-in-part thereof; (d)
all income, royalties, damages, claims, and payments now or hereafter due or
payable under and with respect thereto, including, without limitation, damages
and payments for past and future infringements thereof; (e) all rights to sue
for past, present, and future infringements thereof; and (f) all rights
corresponding to any of the foregoing throughout the world. 

          “Pledged
Deposits” means all time deposits of money (other than Deposit Accounts and
Instruments), whether or not evidenced by certificates, which a Grantor may
from time to time designate as pledged to the Collateral Agent or to any
Secured Party as security for any Secured Obligations, and all rights to
receive interest on said deposits.

          “Receivables”
means the Accounts, Chattel Paper, Documents, Investment Property, Instruments
or Pledged Deposits, and any other rights or claims to receive money which are
General Intangibles or which are otherwise included as Collateral.

          “Section”
means a numbered section of this Security Agreement, unless another document is
specifically referenced.

          “Security”
shall have the meaning set forth in Article 8 of the UCC, excluding immaterial
Securities received from or with respect to customers in settlement of
Receivables.

          “Senior
Creditor Documents” means (i) prior to the effectiveness of the
Intercreditor Agreement, the Loan Documents and (ii) on and after the
effectiveness of the Intercreditor Agreement, the “Senior Creditor Documents”
(as defined in the Intercreditor Agreement).

          “Stock
Rights” means any securities, dividends or other distributions and any
other right or property which any Grantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any securities or other ownership interests in a corporation,
partnership, joint venture or limited liability company constituting Collateral
and any securities, any right to receive securities and any right to receive
earnings, in which any Grantor now has or hereafter acquires any right, issued
by an issuer of such securities.

          “Supporting
Obligation” shall have the meaning set forth in Article 9 of the UCC.

          “Trademarks”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all trademarks (including service marks),
trade names, trade dress, and trade styles and the registrations and
applications for registration thereof and the goodwill of the business
symbolized by the foregoing; (b) all licenses of the foregoing, whether as
licensee or licensor; (c) all 

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renewals of the
foregoing; (d) all income, royalties, damages, and payments now or hereafter
due or payable with respect thereto, including, without limitation, damages,
claims, and payments for past and future infringements thereof; (e) all rights
to sue for past, present, and future infringements of the foregoing, including
the right to settle suits involving claims and demands for royalties owing; and
(f) all rights corresponding to any of the foregoing throughout the world.

          The
foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

ARTICLE II

GRANT OF SECURITY
INTEREST

          Each
of the Grantors hereby pledges, assigns and grants to the Collateral Agent, on
behalf of and for the benefit of the Secured Parties, a security interest in
all of such Grantor’s right, title and interest, whether now owned or hereafter
acquired, in and to the Collateral to secure the prompt and complete payment
and performance of the Secured Obligations (including, without limitation, the
Secured Obligations as defined in the Intercreditor Agreement upon the
effectiveness of the Intercreditor Agreement). For the avoidance of doubt, the
grant of a security interest herein shall not be deemed to be an assignment of
intellectual property rights owned by the Grantors.

ARTICLE III

REPRESENTATIONS
AND WARRANTIES

          Each
of the Initial Grantors represents and warrants to the Collateral Agent and the
Secured Parties, and each Grantor that becomes a party to this Security
Agreement pursuant to the execution of a Security Agreement Supplement in
substantially the form of Annex I represents and warrants (after giving
effect to supplements to each of the Exhibits hereto with respect to such subsequent
Grantor as attached to such Security Agreement Supplement), that:

          3.1.    Title,
Authorization, Validity and Enforceability. Such Grantor has
good and valid rights in or the power to transfer the Collateral owned by it
and title to the Collateral with respect to which it has purported to grant a
security interest hereunder, free and clear of all Liens except for Liens
permitted under Section 4.1.6 hereof, and has full corporate, limited
liability company or partnership, as applicable, power and authority to grant
to the Collateral Agent the security interest in such Collateral pursuant
hereto. The execution and delivery by such Grantor of this Security Agreement
have been duly authorized by proper corporate, limited liability company, limited
partnership or partnership, as applicable, proceedings, and this Security
Agreement constitutes a legal, valid and binding obligation of such Grantor and
creates a security interest which is enforceable against such Grantor in all
Collateral it now owns or hereafter acquires, except as enforceability may be
limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws relating to or affecting the enforcement of creditors’ rights
generally, (ii) general equitable principles (whether considered in a
proceeding in equity or at law), and (iii) requirements of reasonableness, good
faith and fair dealing. When financing statements have been filed in the
appropriate offices against such Grantor in the locations listed in Exhibit
“E”, the Collateral Agent will have a fully perfected first priority
security interest in the Collateral owned by such Grantor in which a security
interest may be perfected by filing of a financing statement under the UCC,
subject only to Liens permitted under Section 4.1.6 hereof and the
limitations on perfection and priority set forth in the UCC.

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          3.2.    Conflicting
Laws and
Contracts. Neither the execution and delivery by such Grantor
of this Security Agreement, the creation and perfection of the security
interest in the Collateral granted hereunder, nor compliance with the terms and
provisions hereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Grantor, or (ii) such
Grantor’s charter, articles or certificate of incorporation, partnership
agreement or by-laws (or similar constitutive documents), or (iii) the
provisions of any indenture, instrument or agreement to which such Grantor is a
party or is subject, or by which it, or its property may be bound or affected,
or conflict with or constitute a default thereunder, or result in or require
the creation or imposition of any Lien in, of or on the property of such
Grantor pursuant to the terms of any such indenture, instrument or agreement
(other than any Lien of the Collateral Agent on behalf of the Secured Parties).

          3.3.    Principal
Location.
Such Grantor’s mailing address and the location of its place of business (if it
has only one) or its chief executive office (if it has more than one place of
business), is disclosed in Exhibit “A”; such Grantor has no other places
of business except those set forth in Exhibit “A”.

          3.4.    Property
Locations.
The Inventory and Equipment of each Grantor are located solely at the locations
of such Grantor described in Exhibit “A”, except for Inventory and
Equipment which is in transit or Inventory which is located in storage
facilities for use by such Grantor’s sales and marketing operations, at
customer’s premises, or with dealers or distributors for such Grantor’s
Inventory. All of said locations are owned by such Grantor except for locations
(i) which are leased by such Grantor as lessee and designated in Part B of Exhibit
“A” and (ii) at which Inventory is held in a public warehouse or is
otherwise held by a bailee or on consignment by such Grantor as designated in
Part C of Exhibit “A”, with respect to which Inventory such Grantor has
delivered bailment agreements, warehouse receipts, financing statements or
other documents satisfactory to the Collateral Agent to protect the Collateral
Agent’s and the Secured Parties’ security interest in such Inventory. 

          3.5.    No Other
Names; Etc..
Within the five-year period ending as of the date such Person becomes a Grantor
hereunder, such Grantor has not conducted business under any name, changed its
jurisdiction of formation, merged with or into or consolidated with any other
Person, except as disclosed in Exhibit “A”. The name in which such
Grantor has executed this Security Agreement is the exact name as it appears in
such Grantor’s organizational documents, as amended, as filed with such
Grantor’s jurisdiction of organization as of the date such Person becomes a
Grantor hereunder.

          3.6.    No
Default.
No Default exists.

          3.7.    Accounts and
Chattel
Paper. The names of the obligors, amounts owing, due dates
and other information with respect to the Accounts and Chattel Paper owned by
such Grantor are and will be correctly stated in all material respects in all
records of such Grantor relating thereto and in all invoices and reports with
respect thereto furnished to the Collateral Agent by such Grantor from time to
time. As of the time when each Account or each item of Chattel Paper arises,
such Grantor shall be deemed to have represented and warranted that such
Account or Chattel Paper, as the case may be, and all records relating thereto,
are genuine and in all respects what they purport to be.

          3.8.    Filing
Requirements.
None of the Collateral owned by such Grantor is of a type for which security
interests or liens may be perfected by filing under any federal statute except
for Patents, Trademarks and Copyrights held by such Grantor and described in
Part B of Exhibit “B”.

          3.9.    No Financing
Statements. No financing statement describing all or any
portion of the Collateral which has not lapsed or been terminated naming such
Grantor as debtor has been filed in any jurisdiction except financing
statements (i) naming the Collateral Agent on behalf of the Secured Parties 

6

as the secured party and
(ii) in respect of Liens permitted by Section 6.02 of the Credit Agreement and
the comparable provisions of the Note Agreement; provided, that nothing
herein shall be deemed to constitute an agreement to subordinate any of the
Liens of the Collateral Agent under the Senior Creditor Documents to any Liens
otherwise permitted under Section 6.02 of the Credit Agreement and the
comparable provisions of the Note Agreement.

          3.10.   Federal Employer
Identification Number; State Organization Number; Jurisdiction of Organization.
Such Grantor’s federal employer identification number is, and if such Grantor
is a registered organization, such Grantor’s State of organization, type of
organization and State of organization identification number are, listed in Exhibit
“G”. 

          3.11.   Pledged Securities
and Other Investment Property. Exhibit “D” sets forth
a complete and accurate list of the Instruments, Securities and other
Investment Property constituting Collateral and delivered to the Collateral
Agent. Each Grantor is the direct and beneficial owner of each Instrument,
Security and other type of Investment Property listed in Exhibit “D” as
being owned by it, free and clear of any Liens, except for the security
interest granted to the Collateral Agent for the benefit of the Secured Parties
hereunder or as permitted by Section 6.02 of the Credit Agreement and the
comparable provisions of the Note Agreement. Each Grantor further represents
and warrants that (i) all such Instruments, Securities or other types of
Investment Property which are shares of stock in a corporation or ownership
interests in a partnership or limited liability company have been (to the
extent such concepts are relevant with respect to such Instrument, Security or
other type of Investment Property) duly and validly issued, are fully paid and
non-assessable and constitute the percentage of the issued and outstanding
shares of stock (or other equity interests) of the respective issuers thereof
indicated in Exhibit “D” hereto and (ii) with respect to any
certificates delivered to the Collateral Agent representing an ownership
interest in a partnership or limited liability company, either such
certificates are Securities as defined in Article 8 of the UCC of the
applicable jurisdiction as a result of actions by the issuer or otherwise, or,
if such certificates are not Securities, such Grantor has so informed the
Collateral Agent so that the Collateral Agent may take steps to perfect its
security interest therein as a General Intangible.

          3.12.   Intellectual
Property.

	
 

	
 

	
 

	
           3.12.1
 Exhibit “B” contains a complete and accurate listing as of the date
 hereof of all U.S. Intellectual Property of each of the Grantors, including,
 but not limited to the following: (i) state and U.S. trademark registrations,
 applications for trademark registration and common law trademarks, (ii) U.S.
 patents and patents applications, together with all reissuances,
 continuations, continuations in part, revisions, extensions, and
 reexaminations thereof, (iii) U.S. copyright registrations and applications
 for registration, (iv) industrial design registrations and industrial design
 applications, (v) trade secrets, (vi) domain names, (vii) proprietary computer
 software, (viii) all forms of Intellectual Property described in clauses
 (i)-(iii) above that are owned by a third party and licensed to the Grantors
 or otherwise used by the Grantors under contract, and (ix) the names of any
 Person who has been granted rights in respect thereof outside of the ordinary
 course of business. All of the U.S. registrations, applications for
 registration or applications for issuance of the Intellectual Property are
 valid and subsisting, in good standing and are recorded or is in the process
 of being recorded in the name of the applicable Grantor.

	
 

	
 

	
 

	
           3.12.2
 Such Intellectual Property’s valid, subsisting, unexpired (where registered)
 and enforceable and has not been abandoned or adjudged invalid or
 unenforceable, in whole or in part except as could not be reasonably expected
 to result in a Material Adverse Effect.

	
 

	
 

	
 

	
           3.12.3
 No Person other than the respective Grantor has any right or interest of any
 kind or nature in or to the Intellectual Property, including any right to
 sell, license, lease, transfer, 

7

	
 

	
 

	
 

	
distribute, use or
 otherwise exploit the Intellectual Property or any portion thereof outside of
 the ordinary course of the respective Grantor’s business, except as noted on
 Exhibit B. Each Grantor has good, marketable and exclusive title to, and the
 valid and enforceable power and right to sell, license, transfer, distribute,
 use and otherwise exploit, its Intellectual Property, except as noted on
 Exhibit B.

	
 

	
 

	
 

	
           3.12.4
 Each Grantor has taken or caused to be taken steps so that none of its
 Intellectual Property, the value of which to the Grantors are contingent upon
 maintenance of the confidentiality thereof, have been disclosed by such
 Grantor to any Person other than employees, contractors, customers,
 representatives and agents of the Grantors who are parties to customary
 confidentiality and nondisclosure agreements with the Grantors except where
 those disclosures, individually or in the aggregate, could not be reasonably
 expected to result in a Material Adverse Effect.

	
 

	
 

	
 

	
           3.12.5
 To each Grantor’s knowledge, no Person has violated, infringed upon or
 breached, or is currently violating, infringing upon or breaching, any of the
 rights of the Grantors to the Intellectual Property or has breached or is
 breaching any duty or obligation owed to the Grantors in respect of the
 Intellectual Property except where those breaches, individually or in the
 aggregate, could not be reasonably expected to result in a Material Adverse
 Effect.

	
 

	
 

	
 

	
           3.12.6
 No settlement or consents, covenants not to sue, nonassertion assurances, or
 releases have been entered into by any Grantor or to which any Grantor is
 bound that adversely affects its rights to own or use any Intellectual
 Property except as could not be reasonably expected to result in a Material
 Adverse Effect, in each case individually or in the aggregate.

	
 

	
 

	
 

	
           3.12.7
 No Grantor has received any written notice that remains outstanding
 challenging the validity, enforceability, or ownership of any Intellectual
 Property except where those challenges could not reasonably be expected to
 result in a Material Adverse Effect, and to such Grantor’s knowledge at the
 date hereof there are no facts upon which such a challenge could be made.

	
 

	
 

	
 

	
           3.12.8
 Each Grantor owns directly or is entitled to use, by license or otherwise,
 all Intellectual Property necessary for the conduct of such Grantor’s
 business.

	
 

	
 

	
 

	
           3.12.9
 Each Grantor uses adequate standards of quality in the manufacture,
 distribution, and sale of all products sold and in the provision of all
 services rendered under or in connection with all trademarks and has taken
 all commercially reasonable action necessary to insure that all licensees of
 the trademarks owned or licensed by such Grantor use such adequate standards
 of quality, except where the failure to use adequate standards of quality
 could not reasonably be expected to result in a Material Adverse Effect.

	
 

	
 

	
 

	
           3.12.10
 The consummation of the transactions contemplated by the Senior Creditor
 Documents will not result in the termination or material impairment of any of
 the Intellectual Property.

ARTICLE IV

COVENANTS

           From
the date of this Security Agreement and thereafter until this Security
Agreement is terminated pursuant to Section 8.12 hereof, each of the Initial
Grantors agrees, and from and after the 

8

effective date of any
Security Agreement Supplement applicable to any Grantor (and after giving
effect to supplements to each of the Exhibits hereto with respect to such
subsequent Grantor as attached to such Security Agreement Supplement) and
thereafter until this Security Agreement is terminated each such subsequent
Grantor agrees:

          4.1.    General.

	
 

	
 

	
 

	
          4.1.1
 Inspection.
 Subject to the limitations set forth in the Senior Creditor Documents, each
 Grantor will permit the Collateral Agent or any Secured Party, by its
 representatives and agents (i) to inspect the Collateral, (ii) to examine and
 make copies of the records of such Grantor relating to the Collateral and
 (iii) to discuss the Collateral and the related records of such Grantor with,
 and to be advised as to the same by, such Grantor’s officers and employees
 (and, in the case of any Receivable, with any person or entity which is or
 may be obligated thereon), all at such reasonable times and intervals as the
 Collateral Agent or such Secured Party may determine, and all at such
 Grantor’s expense.

	
 

	
 

	
 

	
          4.1.2
 Taxes.
 Such Grantor will pay when due all taxes, assessments and governmental
 charges and levies upon the Collateral owned by such Grantor, except (i)
 those which are being contested in good faith by appropriate proceedings and
 with respect to which adequate reserves have been set aside in accordance
 with GAAP and with respect to which no Lien exists, and (ii) those which by
 reason of the amount involved or the remedies available to the taxing
 authority could not reasonably be expected to have a Material Adverse Effect.

	
 

	
 

	
 

	
          4.1.3
 Records
 and Reports; Notification of Default. Each Grantor shall
 keep and maintain complete, accurate and proper books and records with
 respect to the Collateral owned by such Grantor, and furnish to the
 Collateral Agent, with sufficient copies for each of the Secured Parties,
 such reports relating to the Collateral as the Collateral Agent shall from
 time to time reasonably request. Each Grantor will give prompt notice in
 writing to the Collateral Agent and the Lenders of the occurrence and
 continuance of a Default and of any other development, financial or
 otherwise, which could reasonably be expected to materially and adversely
 affect the Collateral.

	
 

	
 

	
 

	
          4.1.4
 Financing
 Statements and Other Actions; Defense of Title. Each
 Grantor hereby authorizes the Collateral Agent to file, and if requested will
 execute and deliver to the Collateral Agent, all financing statements
 describing the Collateral owned by such Grantor and other documents and take
 such other actions as may from time to time reasonably be requested by the
 Collateral Agent in order to maintain a first priority, perfected security
 interest in and, if applicable, Control of, the Collateral owned by such
 Grantor, subject to Liens permitted under Section 6.02 of the Credit
 Agreement and the comparable provisions of the Note Agreement, provided that
 nothing herein shall be deemed to constitute an agreement to subordinate any
 of the Liens of the Collateral Agent under the Loan Documents to any Liens
 otherwise permitted under Section 6.02 of the Credit Agreement and the
 comparable provisions of the Note Agreement. Such financing statements may
 describe the Collateral in the same manner as described herein or may contain
 an indication or description of collateral that describes such property in any
 other manner as the Collateral Agent may determine, in its reasonable
 discretion, is necessary, advisable or prudent to ensure that the perfection
 of the security interest in the Collateral granted to the Collateral Agent
 herein, including, without limitation, describing such property as “all
 assets (other than the Excluded Assets described and defined in the Pledge
 and Security Agreement dated as of March 4, 2009 by and among the Debtor,
 other parties and the Secured Party)” or “all assets whether now owned or hereafter acquired and wheresoever located,
 including all accessions thereto and proceeds thereof (other than the
 Excluded Assets described 

9

	
 

	
 

	
 

	
and defined in the
 Pledge and Security Agreement dated as of March 4, 2009 by and among the
 Debtor, other parties and the Secured Party).” Each Grantor will take any and
 all actions reasonably necessary to defend title to the Collateral owned by
 such Grantor against all persons and to defend the security interest of the
 Collateral Agent in such Collateral and the priority thereof against any Lien
 not expressly permitted hereunder.

	
 

	
 

	
 

	
          4.1.5
 Disposition
 of Collateral. No Grantor will sell, lease or otherwise
 dispose of the Collateral owned by such Grantor except (i) prior to the
 occurrence and continuance of a Default, dispositions specifically permitted
 pursuant to Section 6.03 of the Credit Agreement and the comparable
 provisions of the Note Agreement, (ii) until such time following the
 occurrence and the continuance of a Default as such Grantor receives a notice
 from the Collateral Agent instructing such Grantor to cease such
 transactions, sales or leases of Inventory in the ordinary course of
 business, (iii) dispositions of Intellectual Property which is no longer
 useful or necessary in such Grantor’s business as reasonably determined by
 such Grantor, and (iv) until such time as such Grantor receives a notice from
 the Collateral Agent pursuant to Article VII, proceeds of Inventory
 and Accounts collected in the ordinary course of business.

	
 

	
 

	
 

	
          4.1.6
 Liens.
 No Grantor will create, incur, or suffer to exist any Lien on the Collateral
 owned by such Grantor except Liens permitted pursuant to Section 6.02 of the
 Credit Agreement and the comparable provisions of the Note Agreement, provided,
 that nothing herein shall be deemed to constitute an agreement to subordinate
 any of the Liens of the Collateral Agent under the Senior Creditor Documents
 to any Liens otherwise permitted under Section 6.02 of the Credit Agreement
 and the comparable provisions of the Note Agreement.

	
 

	
 

	
 

	
          4.1.7
 Change
 in Corporate Existence, Type or Jurisdiction of Organization, Location, Name.
 Each Grantor will:

	
 

	
 

	
 

	
 

	
(i)

	
preserve its existence
 and corporate structure as in effect on the date hereof;

	
 

	
 

	
 

	
 

	
(ii)

	
not change its
 jurisdiction of organization;

	
 

	
 

	
 

	
 

	
(iii)

	
not maintain its place
 of business (if it has only one) or its chief executive office (if it has
 more than one place of business) at a location other than a location
 specified in Exhibit “A”; and

	
 

	
 

	
 

	
 

	
(iv)

	
not (i) have any
 Inventory, Equipment or proceeds or products thereof (other than Inventory
 and proceeds thereof disposed of as permitted by Section 4.1.5) at a
 location other than a location specified in Exhibit “A” or as
 described in Section 3.4, (ii) change its name or taxpayer
 identification number or (iii) change its mailing address,

	
 

	
 

	
 

	
 

	
unless, in each such
 case, such Grantor shall have given the Collateral Agent not less than thirty
 (30) days’ prior written notice of such event or occurrence and the
 Collateral Agent shall have either (x) determined that such event or
 occurrence will not adversely affect the validity, perfection or priority of
 the Collateral Agent’s security interest in the Collateral, or (y) taken such
 steps (with the cooperation of such Grantor to the extent necessary or
 advisable) as are necessary or advisable to properly maintain the validity,
 perfection and priority of the Collateral Agent’s security interest in the
 Collateral owned by such Grantor.

	
 

	
 

	
 

	
           4.1.8
 Other
 Financing Statements. No Grantor will suffer to exist or
 authorize the filing of any financing statement naming it as debtor covering
 all or any portion of the Collateral owned by such Grantor, except any
 financing statement authorized under Section 4.1.4 hereof and 

10

	
 

	
 

	
 

	
financing statements
 filed with respect to Liens otherwise permitted under Section 6.02 of the
 Credit Agreement and the comparable provisions of the Note Agreement.

          4.2.    Receivables.

	
 

	
 

	
 

	
          4.2.1
 Certain
 Agreements on Receivables. Following the occurrence and
 during the continuation of a Default, upon reasonable notice from the
 Collateral Agent, no Grantor will make or agree to make any discount, credit,
 rebate or other reduction in the original amount owing on a Receivable or
 accept in satisfaction of a Receivable less than the original amount thereof.
 Prior to the occurrence and continuation of a Default, such Grantor may
 reduce the amount of Accounts arising from the sale of Inventory or the
 rendering of services in accordance with its present policies and in the
 ordinary course of business and as otherwise permitted under the Credit
 Agreement and the Note Agreement.

	
 

	
 

	
 

	
          4.2.2
 Collection
 of Receivables. Except as otherwise provided in this
 Security Agreement, each Grantor will collect and enforce, at such Grantor’s
 sole expense, in accordance with its present policies and in the ordinary
 course of business, all amounts due or hereafter due to such Grantor under
 the Receivables owned by such Grantor.

	
 

	
 

	
 

	
          4.2.3
 Delivery
 of Invoices. Each Grantor will deliver to the Collateral
 Agent immediately upon its request after the occurrence and during the
 continuation of a Default duplicate invoices with respect to each Account
 owned by such Grantor bearing such language of assignment as the Collateral
 Agent shall reasonably specify.

	
 

	
 

	
 

	
          4.2.4
 Disclosure
 of Counterclaims on Receivables. If (i) any material
 discount, credit or agreement to make a rebate or to otherwise reduce the
 amount owing on a Receivable owned by a Grantor exists or (ii) if, to the
 knowledge of a Grantor, any material dispute, setoff, claim, counterclaim or
 defense exists or has been asserted or threatened with respect to a
 Receivable, such Grantor will disclose such fact to the Collateral Agent in
 writing in connection with the inspection by the Collateral Agent of the
 records of such Grantor relating to such Receivable and in connection with
 any invoice or report furnished by such Grantor to the Collateral Agent
 relating to such Receivable.

          4.3.    Maintenance
of Goods.
Each Grantor will do all things reasonably necessary to maintain, preserve,
protect and keep the Inventory and the Equipment owned by such Grantor in good
repair, working order and saleable condition (ordinary wear and tear excepted)
and make all necessary and proper repairs, renewals and replacements so that
its business carried on in connection therewith may be properly conducted at
all times, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

          4.4.    Instruments,
Securities, Chattel Paper, Documents and Pledged Deposits.
Each Grantor will (i) deliver to the Collateral Agent immediately upon
execution of this Security Agreement the originals of any Chattel Paper to the
extent representing an amount in excess of $200,000, Securities (to the extent
certificated) and Instruments constituting Collateral (if any then exist), (ii)
hold in trust for the Collateral Agent upon receipt and immediately thereafter
deliver to the Collateral Agent any such Chattel Paper, Securities and
Instruments constituting Collateral, (iii) upon the designation of any Pledged
Deposits (as set forth in the definition thereof), deliver to the Collateral
Agent such Pledged Deposits which are evidenced by certificates included in the
Collateral endorsed in blank, marked with such legends and assigned as the
Collateral Agent shall specify, and (iv) upon the Collateral Agent’s request,
after the occurrence and during the continuance of a Default, deliver to the
Collateral Agent (and 

11

thereafter hold in trust
for the Collateral Agent upon receipt and immediately deliver to the Collateral
Agent) any Document evidencing or constituting Collateral.

          4.5.    Uncertificated
Securities and Certain Other Investment Property. Each
Grantor will permit the Collateral Agent from time to time to cause the
appropriate issuers (and, if held with a securities intermediary, such
securities intermediary) of uncertificated securities or other types of
Investment Property not represented by certificates which are Collateral owned
by such Grantor to mark their books and records with the numbers and face
amounts of all such uncertificated securities or other types of Investment
Property not represented by certificates and all rollovers and replacements
therefor to reflect the Lien of the Collateral Agent granted pursuant to this
Security Agreement. Each Grantor will use all commercially reasonable efforts,
with respect to Investment Property constituting Collateral owned by such
Grantor held with a financial intermediary, to cause such financial
intermediary to enter into a control agreement with the Collateral Agent in
form and substance reasonably satisfactory to the Collateral Agent.

          4.6.    Stock and
Other
Ownership Interests.

	
 

	
 

	
 

	
          4.6.1
 Changes
 in Capital Structure of Issuers. Except as permitted in the
 Credit Agreement and the Note Agreement, no Grantor will (i) permit or suffer
 any issuer of privately held corporate securities or other ownership
 interests in a corporation, partnership, joint venture or limited liability
 company constituting Collateral owned by such Grantor to dissolve, liquidate,
 retire any of its capital stock or other Instruments or Securities evidencing
 ownership, reduce its capital or merge or consolidate with any other entity,
 or (ii) vote any of the Instruments, Securities or other Investment Property
 in favor of any of the foregoing except to the extent permitted under Section
 6.03 of the Credit Agreement.

	
 

	
 

	
 

	
          4.6.2
 Issuance
 of Additional Securities. No Grantor will permit or suffer
 the issuer, which is a Subsidiary of such Grantor, of privately held
 corporate securities or other ownership interests in a corporation,
 partnership, joint venture or limited liability company constituting
 Collateral to issue any such securities or other ownership interests, any
 right to receive the same or any right to receive earnings, except to such
 Grantor.

	
 

	
 

	
 

	
          4.6.3
 Registration
 of Pledged Securities and other Investment Property. Each
 Grantor will permit any registrable Collateral owned by such Grantor to be
 registered in the name of the Collateral Agent or its nominee at any time at
 the option of the Required Lenders following the occurrence and during the
 continuance of a Default and without any further consent of such Grantor.

	
 

	
 

	
 

	
          4.6.4
 Exercise
 of Rights in Pledged Securities and other Investment Property.
 Each Grantor will permit the Collateral Agent or its nominee at any time
 after the occurrence and during the continuance of a Default, without notice,
 to exercise or refrain from exercising any and all voting and other
 consensual rights pertaining to the Collateral owned by such Grantor or any
 part thereof, and to receive all dividends and interest in respect of such
 Collateral.

           4.7.    Deposit
Accounts.
Each Grantor will (i) upon the Collateral Agent’s request, cause each bank or
other financial institution in which it maintains (a) a Deposit Account to
enter into a control agreement with the Collateral Agent, in form and substance
satisfactory to the Collateral Agent in order to give the Collateral Agent
Control of the Deposit Account or (b) other deposits (general or special, time
or demand, provisional or final) to be notified of the security interest
granted to the Collateral Agent hereunder and cause each such bank or other
financial institution to acknowledge such notification in writing and (ii) upon
the Collateral Agent’s request after the occurrence and during the continuance
of a 

12

Default, deliver to each
such bank or other financial institution a letter, in form and substance
acceptable to the Collateral Agent, transferring dominion and control over each
such other deposit to the Collateral Agent until such time as no Default
exists. In the case of deposits maintained with Lenders, the terms of such
letter shall be subject to the provisions of the Credit Agreement but subject
to the Intercreditor Agreement regarding setoffs.

           4.8.    Letter-of-Credit
Rights. Each Grantor will, upon the Collateral Agent’s
request, cause each issuer of a letter of credit in an amount equal to or in
excess of $100,000 for which such Grantor is the beneficiary, to consent to the
assignment of proceeds of the letter of credit in order to give the Collateral
Agent Control of the letter-of-credit rights to such letter of credit.

           4.9.    Federal,
State or
Municipal Claims. Each Grantor will notify the Collateral
Agent of any material Collateral owned by such Grantor which constitutes a
claim against the United States government or any state or local government or
any instrumentality or agency thereof, the assignment of which claim is
restricted by federal, state or municipal law. Furthermore, each Grantor will
execute and deliver to the Collateral Agent such documents, agreements and
instruments, and will take such further actions (including, without limitation,
the taking of necessary actions under the Federal Assignment of Claims Act of
1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.)), which
the Collateral Agent may, from time to time, reasonably request, to ensure
perfection and priority of the Liens hereunder in respect of material Accounts
and General Intangibles owing by any government or instrumentality or agency
thereof, all at the expense of the Company.

           4.10.   Intellectual
Property.

	
 

	
 

	
 

	
           4.10.1
 If, after the date hereof, any Grantor obtains rights
 to, including, but not limited to filing and acceptance of a statement of use
 or an amendment to allege use with the United States Patent and Trademark
 Office, or applies for or seeks registration of, any new patentable
 invention, Trademark or Copyright in addition to the Patents, Trademarks and
 Copyrights described in Part B of Exhibit “B”, which are all of such
 Grantor’s U.S. Patents, Trademarks and Copyrights as of the date hereof, then
 such Grantor shall give the Collateral Agent notice thereof, as part of each
 compliance certificate provided to the Collateral Agent pursuant to the
 Credit Agreement and the comparable certificate provided pursuant to the Note
 Agreement. Each Grantor agrees promptly upon request by the Collateral Agent
 to execute and deliver to the Collateral Agent any supplement to this
 Security Agreement or any other document reasonably requested by the
 Collateral Agent to evidence such security interest in a form appropriate for
 recording in the applicable U.S. federal office. Each Grantor also hereby
 authorizes the Collateral Agent to modify this Security Agreement
 unilaterally (i) by amending Part B of Exhibit “B” to include any
 future U.S. Patents, Trademarks and/or Copyrights of which the Collateral
 Agent receives notification from such Grantor pursuant hereto and (ii) by
 recording, in addition to and not in substitution for this Security
 Agreement, a duplicate original of this Security Agreement containing in Part
 B of Exhibit “B” a description of such future Patents, Trademarks
 and/or Copyrights.

	
 

	
 

	
 

	
           4.10.2
 As of the date hereof, no Grantor has any interest in, or title to, any U.S.
 Copyrights, Intellectual Property Licenses, Patents, Trademarks or Industrial
 Design except as set forth in Exhibit “B”. This Agreement is effective to create a valid and continuing
 Lien on such Copyrights, Intellectual Property Licenses, Patents, Trademarks
 and Industrial Designs and, upon filing of the Confirmatory Grant of Security
 Interest in Copyrights with the United States Copyright Office and filing of
 the Confirmatory Grant of Security Interest in Patents with the United States
 Patent and Trademark Office, and the filing of appropriate financing
 statements in the jurisdictions listed in Exhibit “E” hereto, all action necessary or desirable to protect
 and 

13

	
 

	
 

	
 

	
perfect the security
 interest in, to and on each Grantor’s U.S. Patents, Trademarks, Copyrights or
 Industrial Designs has been taken and such perfected security interest is
 enforceable as such as against any and all creditors of and purchasers from
 any Grantor. No Grantor has any interest in any U.S. Copyright that is
 necessary in connection with the operation of such Grantor’s business, except
 for those Copyrights identified in Exhibit “B” attached hereto which have been registered with the
 United States Copyright Office.

           4.11.   Commercial Tort
Claims. If, after the date hereof,
any Grantor identifies the existence of a Commercial Tort Claim belonging to
such Grantor that has arisen in the course of such Grantor’s business in
addition to the Commercial Tort Claims described in Exhibit “F”, which are all of such Grantor’s Commercial
Tort Claims
as of the date hereof, then such Grantor shall give the Collateral
Agent prompt notice thereof, but in any event not less
frequently than quarterly. Each Grantor agrees promptly upon request by the Collateral
Agent to execute and deliver to the Collateral
Agent any supplement to this Security Agreement or any
other document reasonably requested by the Collateral Agent to evidence the grant of a security interest therein in
favor of the Collateral Agent.

           4.12.   Updating of
Exhibits
to Security Agreement. The
Company will provide to the Collateral Agent, concurrently with the delivery of
the certificate of a Financial Officer of the Company as required by Section
5.01(c) of the Credit Agreement or the comparable provisions of the Note
Agreement, updated versions of the Exhibits to this Security Agreement,
provided that if there have been no material changes with respect to the
information set forth on any such Exhibits since the previous updating thereof
required hereby, the Company shall indicate that there has been “no material
change” to the applicable Exhibit(s).

ARTICLE V

DEFAULT

          5.1.    The
occurrence of any one or more of the following events shall constitute a
Default:

	
 

	
 

	
 

	
          5.1.1
 The breach by any Grantor of any of the terms or provisions of Article IV
 or Article VII.

	
 

	
 

	
 

	
          5.1.2
 The breach by any Grantor (other than a breach which constitutes a Default
 under Section 5.1.1 or 5.1.2 hereof) of any of the terms or
 provisions of this Security Agreement which is not remedied within ten (10)
 days after the giving of written notice to such Grantor by the Collateral
 Agent.

	
 

	
 

	
 

	
          5.1.3
 Any material portion of the Collateral shall be lost, stolen, damaged or
 destroyed.

	
 

	
 

	
 

	
          5.1.4
 The occurrence of any “Event of Default” under, and as defined in, the Credit
 Agreement and, upon the effectiveness of the Intercreditor Agreement, the
 occurrence of a “Default” under, and as defined in, the Intercreditor
 Agreement.

          5.2.   Acceleration and
Remedies. Upon the occurrence and continuance of a Default,
the Collateral Agent may, in accordance with the terms of the Senior Creditor
Documents, exercise any or all of the following rights and remedies:

	
 

	
 

	
 

	
          5.2.1
 Those rights and remedies provided in this Security Agreement, the Credit
 Agreement, or any other Senior Creditor Document, provided
 that this Section 5.2.1 shall not be understood to limit any rights or
 remedies available to the Collateral Agent and the Secured Parties prior to a
 Default.

14

	
 

	
 

	
 

	
          5.2.2
 Those rights and remedies available to a secured party under the UCC (whether
 or not the UCC applies to the affected Collateral) or under any other
 applicable law (including, without limitation, any law governing the exercise
 of a bank’s right of setoff or bankers’ lien) when a debtor is in default
 under a security agreement.

	
 

	
 

	
 

	
          5.2.3
 Without notice except as specifically provided in Section 8.1 hereof
 or elsewhere herein, sell, lease, assign, grant an option or options to
 purchase or otherwise dispose of the Collateral or any part thereof in one or
 more parcels at public or private sale, for cash, on credit or for future
 delivery, and upon such other terms as the Collateral Agent may deem
 commercially reasonable.

The Collateral Agent, on
behalf of the Secured Parties, may comply with any applicable state or federal
law requirements in connection with a disposition of the Collateral, and such
compliance will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

If, after the Credit
Agreement, the Note Agreement and the other documents evidencing the
Obligations have terminated by their terms and all of the Secured Obligations
have been paid in full, there remain outstanding Swap Obligations or Banking
Services Obligations, the Required Lenders may exercise the remedies provided
in this Section 5.2 upon the occurrence of any event which would allow
or require the termination or acceleration of any Swap Obligations by a party
thereto other than a Grantor or Banking Services Obligations, provided that no
such remedies may be exercised following termination of this Security Agreement
as provided in Section 8.12.

          5.3.    Grantors’
Obligations Upon Default. Upon the request of the Collateral
Agent after the occurrence and during the continuance of a Default, each
Grantor will:

	
 

	
 

	
 

	
          5.3.1
 Assembly
 of Collateral. Assemble and make available to the
 Collateral Agent the Collateral and all records relating thereto at any place
 or places specified by the Collateral Agent.

	
 

	
 

	
 

	
          5.3.2
 Secured
 Party Access. Permit the Collateral Agent, by the
 Collateral Agent’s representatives and agents, to enter any premises where
 all or any part of the Collateral, or the books and records relating thereto,
 or both, are located, to take possession of all or any part of the Collateral
 and to remove all or any part of the Collateral.

          5.4.    License.
The Collateral Agent is hereby granted a non-exclusive license or other
non-exclusive right to use, following the occurrence and during the continuance
of a Default, without charge, each Grantor’s labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks, service
marks, customer lists and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral, and, following the occurrence
and during the continuance of a Default, such Grantor’s rights under all
licenses and all franchise agreements shall inure to the Collateral Agent’s
benefit. In addition, each Grantor hereby irrevocably agrees that the
Collateral Agent may, following the occurrence and during the continuance of a
Default, sell any of such Grantor’s Inventory directly to any person, including
without limitation persons who have previously purchased such Grantor’s
Inventory from such Grantor and in connection with any such sale or other
enforcement of the Collateral Agent’s rights under this Security Agreement, may
sell Inventory which bears any trademark owned by or licensed to such Grantor
and any Inventory that is covered by any copyright owned by or licensed to such
Grantor and the Collateral Agent may finish any work in process and affix any
trademark owned by or licensed to such Grantor and sell such Inventory as
provided herein.

15

ARTICLE VI

WAIVERS,
AMENDMENTS AND REMEDIES

          No
delay or omission of the Collateral Agent or any Secured Party to exercise any
right or remedy granted under this Security Agreement shall impair such right
or remedy or be construed to be a waiver of any Default or an acquiescence
therein, and any single or partial exercise of any such right or remedy shall
not preclude any other or further exercise thereof or the exercise of any other
right or remedy. No waiver, amendment or other variation of the terms,
conditions or provisions of this Security Agreement whatsoever shall be valid
unless in writing signed by the Collateral Agent and each Grantor, and then
only to the extent in such writing specifically set forth, provided that the
addition of any Subsidiary as a Grantor hereunder by execution of a Security
Agreement Supplement in the form of Annex I (with such modifications as
shall be acceptable to the Collateral Agent) shall not require receipt of any
consent from or execution of any documentation by any other Grantor party
hereto. All rights and remedies contained in this Security Agreement or by law
afforded shall be cumulative and all shall be available to the Collateral Agent
and the Secured Parties until the Secured Obligations have been paid in full.

ARTICLE VII

PROCEEDS;
COLLECTION OF RECEIVABLES

          7.1.    Lockboxes.
Upon request of the Collateral Agent after the occurrence and during the
continuance of a Default, each Grantor shall execute and deliver to the
Collateral Agent irrevocable lockbox agreements in the form provided by or
otherwise acceptable to the Collateral Agent, which agreements shall be
accompanied by an acknowledgment by the bank where the lockbox is located of
the Lien of the Collateral Agent granted hereunder and of irrevocable
instructions to wire all amounts collected therein to a special collateral
account at the Collateral Agent.

          7.2.    Collection of
Receivables. The Collateral Agent may at any time after the
occurrence and during the continuance of a Default, by giving each Grantor
written notice, elect to require that the Receivables be paid directly to the
Collateral Agent for the benefit of the Secured Parties. In such event, each
Grantor shall, and shall permit the Collateral Agent to, promptly notify the
account debtors or obligors under the Receivables owned by such Grantor of the
Collateral Agent’s interest therein and direct such account debtors or obligors
to make payment of all amounts then or thereafter due under such Receivables
directly to the Collateral Agent. Upon receipt of any such notice from the Collateral
Agent, each Grantor shall thereafter hold in trust for the Collateral Agent, on
behalf of the Secured Parties, all amounts and proceeds received by it with
respect to the Receivables and Other Collateral and immediately and at all
times thereafter deliver to the Collateral Agent all such amounts and proceeds
in the same form as so received, whether by cash, check, draft or otherwise,
with any necessary endorsements. The Collateral Agent shall hold and apply
funds so received as provided by the terms of Sections 7.3 and 7.4
hereof.

          7.3.    Special
Collateral
Account. After the occurrence and during the continuance of a
Default, the Collateral Agent may require all cash proceeds of the Collateral
to be deposited in a special non-interest bearing cash collateral account with
the Collateral Agent and held there as security for the Secured Obligations. No
Grantor shall have any control whatsoever over said cash collateral account. If
no Default has occurred and is continuing, the Collateral Agent shall from time
to time deposit the collected balances in said cash collateral account into the
applicable Grantor’s general operating account with the Collateral Agent. If
any Default has occurred and is continuing, the Collateral Agent may, in
accordance with the provisions in the Intercreditor Agreement (to the extent
the Intercreditor Agreement 

16

is in effect), from time
to time, apply the collected balances in said cash collateral account to the
payment of the Secured Obligations whether or not the Secured Obligations shall
then be due.

          7.4.    Application
of
Proceeds. The proceeds of the Collateral received by the
Collateral Agent hereunder shall be applied by the Collateral Agent to payment
of the Secured Obligations as provided under Section 2.18 of the Credit
Agreement but subject to the terms of the Intercreditor Agreement.

ARTICLE VIII

GENERAL PROVISIONS

          8.1.    Notice of
Disposition of Collateral; Condition of Collateral. To the
extent permitted under applicable law, each Grantor hereby waives notice of the
time and place of any public sale or the time after which any private sale or
other disposition of all or any part of the Collateral may be made. To the
extent such notice may not be waived under applicable law, any notice made
shall be deemed reasonable if sent to the Company, addressed as set forth in Article
IX, at least ten (10) days prior to (i) the date of any such public sale or
(ii) the time after which any such private sale or other disposition may be
made. The Collateral Agent shall have no obligation to clean-up or otherwise
prepare the Collateral for sale.

          8.2.    Compromises
and
Collection of Collateral. Each Grantor and the Collateral
Agent recognize that setoffs, counterclaims, defenses and other claims may be
asserted by obligors with respect to certain of the Receivables, that certain
of the Receivables may be or become uncollectible in whole or in part and that
the expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect
to a Receivable. In view of the foregoing, each Grantor agrees that the
Collateral Agent may at any time and from time to time, if a Default has
occurred and is continuing, compromise with the obligor on any Receivable,
accept in full payment of any Receivable such amount as the Collateral Agent in
its sole discretion shall determine or abandon any Receivable, and any such
action by the Collateral Agent shall be commercially reasonable so long as the
Collateral Agent acts in good faith based on information known to it at the
time it takes any such action.

          8.3.    Secured Party
Performance of Grantor’s Obligations. Without having any
obligation to do so, after the occurrence and during the continuance of a
Default, the Collateral Agent may perform or pay any obligation which any
Grantor has agreed to perform or pay in this Security Agreement and such
Grantor shall reimburse the Collateral Agent for any reasonable amounts paid by
the Collateral Agent pursuant to this Section 8.3. Each Grantor’s
obligation to reimburse the Collateral Agent pursuant to the preceding sentence
shall be a Secured Obligation payable on demand.

          8.4.    Authorization for
Secured Party to Take Certain Action. Each Grantor
irrevocably, until this Security Agreement is terminated as provided in Section
8.12, authorizes the Collateral Agent at any time and from time to time in
the sole discretion of the Collateral Agent and appoints the Collateral Agent
as its attorney in fact (i) to execute on behalf of such Grantor as debtor and
to file financing statements necessary or desirable in the Collateral Agent’s
sole discretion to perfect and to maintain the perfection and priority of the
Collateral Agent’s security interest in the Collateral, (ii) to indorse and
collect any cash proceeds of the Collateral, (iii) to file a carbon,
photographic or other reproduction of this Security Agreement or any financing
statement with respect to the Collateral as a financing statement and to file
any other financing statement or amendment of a financing statement (which does
not add new collateral or add a debtor) in such offices as the Collateral Agent
in its sole discretion reasonably deems necessary or desirable to perfect and
to maintain the perfection and priority of the Collateral Agent’s security
interest in the Collateral, (iv) to contact and enter into one or more
agreements with the issuers of 

17

uncertificated securities
which are Collateral owned by such Grantor and which are Securities or with
financial intermediaries holding other Investment Property as may be necessary
or advisable to give the Collateral Agent Control over such Securities or other
Investment Property, (v) subject to the terms of Section 4.1.5 hereof,
to enforce payment of the Instruments, Accounts and Receivables in the name of
the Collateral Agent or such Grantor, (vi) to apply the proceeds of any
Collateral received by the Collateral Agent to the Secured Obligations as
provided in Article VII and (vii) to discharge past due taxes,
assessments, charges, fees or Liens on the Collateral (except for such Liens as
are specifically permitted hereunder or under any other Senior Creditor
Document), and each Grantor agrees to reimburse the Collateral Agent on demand
for any reasonable payment made or any reasonable expense incurred by the
Collateral Agent in connection therewith, provided that this authorization
shall not relieve any Grantor of any of its obligations under this Security
Agreement or under the Credit Agreement or the Note Agreement.

          8.5.    Specific
Performance
of Certain Covenants. Each Grantor acknowledges and agrees
that a breach of any of the covenants contained in Sections 4.1.5, 4.1.6,
4.4, 5.3, or 8.7 or in Article VII hereof will
cause irreparable injury to the Collateral Agent and the Secured Parties, that
the Collateral Agent and Secured Parties have no adequate remedy at law in
respect of such breaches and therefore agrees, without limiting the right of
the Collateral Agent or the Secured Parties to seek and obtain specific
performance of other obligations of the Grantors contained in this Security
Agreement, that the covenants of the Grantors contained in the Sections
referred to in this Section 8.5 shall be specifically enforceable
against the Grantors.

          8.6.    Use and
Possession
of Certain Premises. Upon the occurrence and during the
continuance of a Default, the Collateral Agent shall be entitled to occupy and
use any premises owned or leased by the Grantors where any of the Collateral or
any records relating to the Collateral are located until the Secured
Obligations are paid or the Collateral is removed therefrom, whichever first
occurs, without any obligation to pay any Grantor for such use and occupancy.

          8.7.    Dispositions
Not
Authorized. No Grantor is authorized to sell or otherwise
dispose of the Collateral except as set forth in Section 4.1.5 hereof
and notwithstanding any course of dealing between any Grantor and the
Collateral Agent or other conduct of the Collateral Agent, no authorization to
sell or otherwise dispose of the Collateral (except as set forth in Section
4.1.5 hereof) shall be binding upon the Collateral Agent or the Secured
Parties unless such authorization is in writing signed by the Collateral Agent
with the consent or at the direction of the Required Lenders (to the extent the
Intercreditor Agreement is not in effect) or the Requisite Secured Parties
(upon the effectiveness of the Intercreditor Agreement).

          8.8.    Benefit of
Agreement.
The terms and provisions of this Security Agreement shall be binding upon and
inure to the benefit of the Grantors, the Collateral Agent and the Secured
Parties and their respective successors and assigns (including all persons who
become bound as a debtor to this Security Agreement), except that the Grantors
shall not have the right to assign their rights or delegate their obligations
under this Security Agreement or any interest herein, without the prior written
consent of the Collateral Agent.

          8.9.    Survival of
Representations. All representations and warranties of the
Grantors contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.

          8.10.  Taxes and
Expenses.
Any taxes (including income taxes) payable or ruled payable by a Federal or
State authority in respect of this Security Agreement shall be paid by the
Grantors, together with interest and penalties, if any. The Grantors shall
reimburse the Collateral Agent for any and all reasonable out-of-pocket
expenses and internal charges (including reasonable attorneys’, auditors’ and 

18

accountants’ fees and
reasonable time charges of attorneys, paralegals, auditors and accountants who
may be employees of the Collateral Agent) paid or incurred by the Collateral
Agent in connection with the preparation, execution, delivery, administration,
collection and enforcement of this Security Agreement and in the audit,
analysis, administration, collection, preservation or sale of the Collateral
(including the expenses and charges associated with any periodic or special
audit of the Collateral). Any and all costs and expenses incurred by the
Grantors in the performance of actions required pursuant to the terms hereof
shall be borne solely by the Grantors.

          8.11.   Headings.
The title of and section headings in this Security Agreement are for
convenience of reference only, and shall not govern the interpretation of any
of the terms and provisions of this Security Agreement.

          8.12.   Termination.
This Security Agreement shall continue in effect (notwithstanding the fact that
from time to time there may be no Secured Obligations outstanding) until (i)
any and all commitments to extend credit under the Senior Creditor Documents
have terminated and (ii) all of the Secured Obligations (other than (x)
contingent indemnity obligations and (y) Banking Services Obligations and Swap
Obligations, in each case only to the extent the same are not yet due and
payable) have been indefeasibly paid in cash and performed in full and no commitments
of the Administrative Agent or the Secured Parties which would give rise to any
Secured Obligations, other than Banking Services Obligations and Swap
Obligations, are outstanding.

          8.13.   Entire
Agreement.
This Security Agreement embodies the entire agreement and understanding between
the Grantors and the Collateral Agent relating to the Collateral and supersedes
all prior agreements and understandings among the Grantors and the Collateral
Agent relating to the Collateral.

          8.14.   Governing
Law; Jurisdiction; Waiver of Jury Trial.

	
 

	
 

	
 

	
           8.14.1
 THIS SECURITY AGREEMENT SHALL BE CONSTRUED
 IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

	
 

	
 

	
 

	
           8.14.2
 Each Grantor hereby irrevocably and unconditionally submits, for itself and
 its property, to the nonexclusive jurisdiction of the Supreme Court of the
 State of New York sitting in New York County and of the United States
 District Court of the Southern District of New York, and any appellate court
 from any thereof, in any action or proceeding arising out of or relating to
 this Security Agreement or any other Senior Creditor Document, or for
 recognition or enforcement of any judgment, and each Grantor hereby
 irrevocably and unconditionally agrees that all claims in respect of any such
 action or proceeding may be heard and determined in such New York State or,
 to the extent permitted by law, in such Federal court. Each Grantor agrees
 that a final judgment in any such action or proceeding shall be conclusive
 and may be enforced in other jurisdictions by suit on the judgment or in any
 other manner provided by law. Nothing in this Security Agreement or any other
 Senior Creditor Document shall affect any right that the Collateral Agent may
 otherwise have to bring any action or proceeding relating to this Security
 Agreement or any other Senior Creditor Document against any Grantor or its
 properties in the courts of any jurisdiction.

	
 

	
 

	
 

	
           8.14.3
 Each Grantor hereby irrevocably and unconditionally waives, to the fullest
 extent it may legally and effectively do so, any objection which it may now
 or hereafter have to the laying of venue of any suit, action or proceeding
 arising out of or relating to this Security Agreement or any other Senior
 Creditor Document in any court referred to in Section 8.14.2. 

19

	
 

	
 

	
 

	
Each Grantor hereby
 irrevocably waives, to the fullest extent permitted by law, the defense of an
 inconvenient forum to the maintenance of such action or proceeding in any
 such court.

	
 

	
 

	
 

	
           8.14.4
 Each party to this Security Agreement irrevocably consents to service of
 process in the manner provided for notices in Article IX of this Security
 Agreement, and each of the Grantors hereby appoints the Company as its agent
 for service of process. Nothing in this Security Agreement or any other
 Senior Creditor Document will affect the right of any party to this Security
 Agreement to serve process in any other manner permitted by law.

	
 

	
 

	
 

	
           8.14.5 WAIVER OF
 JURY TRIAL. EACH GRANTOR HEREBY WAIVES, TO THE FULLEST EXTENT
 PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
 PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY
 AGREEMENT OR ANY OTHER SENIOR CREDITOR DOCUMENT (WHETHER BASED ON CONTRACT,
 TORT OR ANY OTHER THEORY). EACH GRANTOR CERTIFIES THAT NO REPRESENTATIVE,
 AGENT OR ATTORNEY OF ANY OTHER GRANTOR HAS REPRESENTED, EXPRESSLY OR
 OTHERWISE, THAT SUCH OTHER GRANTOR WOULD NOT, IN THE EVENT OF LITIGATION,
 SEEK TO ENFORCE THE FOREGOING WAIVER.

           8.15.   Indemnity.
Each Grantor hereby agrees, jointly with the other Grantors and severally, to
indemnify the Collateral Agent and the Secured Parties, and their respective
successors, assigns, agents and employees (each, an “Indemnitee”), from and
against any and all liabilities, damages, penalties, suits, costs, and expenses
of any kind and nature (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Collateral Agent or any
Secured Party is a party thereto) imposed on, incurred by or asserted against
the Collateral Agent or the Secured Parties, or their respective successors,
assigns, agents and employees, in any way relating to or arising out of this
Security Agreement or any other Senior Creditor Document, or the manufacture,
purchase, acceptance, rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of any Collateral (including,
without limitation, latent and other defects, whether or not discoverable by
the Collateral Agent or the Secured Parties or any Grantor, and any claim for
patent, trademark or copyright infringement), provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or from the
breach by such Indemnitee of its material obligations under the Senior Creditor
Documents.

           8.16.   Subordination
of Intercompany Indebtedness. Each Grantor agrees that any and all claims
of such Grantor against any other Grantor (each an “Obligor”) with
respect to any “Intercompany Indebtedness” (as hereinafter defined), any
endorser, obligor or any other guarantor of all or any part of the Secured
Obligations, or against any of its properties shall be subordinate and subject
in right of payment to the prior payment, in full and in cash, of all Secured
Obligations, provided that, and not in contravention of the foregoing, so long
as no Default has occurred and is continuing, such Grantor may make loans to
and receive payments in the ordinary course of business with respect to such
Intercompany Indebtedness from each such Obligor to the extent not prohibited
by the terms of this Security Agreement and the other Senior Creditor
Documents. Notwithstanding any right of any Grantor to ask, demand, sue for,
take or receive any payment from any Obligor, all rights, liens and security
interests of such Grantor, whether now or hereafter arising and howsoever
existing, in any assets of any other Obligor shall be and are subordinated to
the rights of the Secured Parties and the Collateral Agent in those assets. No
Grantor shall have any right to possession of any such asset or to foreclose
upon any such asset, whether by judicial action or otherwise, unless and until
this Security Agreement has terminated in accordance with

20

Section 8.12
hereof. After the occurrence and during the continuance of a Default, if all or
any part of the assets of any Obligor, or the proceeds thereof, are subject to
any distribution, division or application to the creditors of such Obligor,
whether partial or complete, voluntary or involuntary, and whether by reason of
liquidation, bankruptcy, arrangement, receivership, assignment for the benefit
of creditors or any other action or proceeding, or if the business of any such
Obligor is dissolved or if substantially all of the assets of any such Obligor
are sold, then, and in any such event (such events being herein referred to as
an “Insolvency Event”), any payment or distribution of any kind or
character, either in cash, securities or other property, which shall be payable
or deliverable upon or with respect to any indebtedness of any Obligor to any
Grantor (“Intercompany Indebtedness”) shall be paid or delivered
directly to the Collateral Agent for application on any of the Secured
Obligations, due or to become due, until such Secured Obligations (other than
contingent indemnity obligations) shall have first been fully paid and satisfied
(in cash). Should any payment, distribution, security or instrument or proceeds
thereof be received by the applicable Grantor upon or with respect to the
Intercompany Indebtedness after any Insolvency Event and prior to the
termination of this Security Agreement in accordance with Section 8.12
hereof, such Grantor shall receive and hold the same in trust, as trustee, for
the benefit of the Secured Parties and shall forthwith deliver the same to the
Collateral Agent, for the benefit of the Secured Parties, in precisely the form
received (except for the endorsement or assignment of the Grantor where
necessary), for application to any of the Secured Obligations, due or not due,
and, until so delivered, the same shall be held in trust by the Grantor as the
property of the Secured Parties. If any such Grantor fails to make any such
endorsement or assignment to the Collateral Agent, the Collateral Agent or any
of its officers or employees is irrevocably authorized to make the same. Each
Grantor agrees that until the termination of this Security Agreement in
accordance with Section 8.12 hereof, no Grantor will assign or transfer
to any Person (other than the Collateral Agent or the Company or another
Grantor) any claim any such Grantor has or may have against any Obligor. 

          8.17.   
Severability. Any provision in this Security Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Security Agreement are declared to be severable.

          8.18.   Counterparts.
This Security Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. Delivery of an executed counterpart of a signature page of this
Security Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Security Agreement.

ARTICLE IX

NOTICES

          9.1.    Sending
Notices.
Any notice required or permitted to be given under this Security Agreement shall
be sent (and deemed received) in the manner and to the addresses set forth in
Section 9.01 of the Credit Agreement. Any notice delivered to the Company shall
be deemed to have been delivered to all of the Grantors.

          9.2.    Change in
Address
for Notices. Each of the Grantors, the Collateral Agent and
the Lenders may change the address for service of notice upon it by a notice in
writing to the other parties.

21

ARTICLE X

THE COLLATERAL
AGENT

          JPMorgan
Chase Bank, N.A. has been appointed Collateral Agent for the Secured Parties
hereunder pursuant to Article VIII of the Credit Agreement and the terms of the
Intercreditor Agreement. It is expressly understood and agreed by the parties
to this Security Agreement that any authority conferred upon the Collateral Agent
hereunder is subject to the terms of the delegation of authority made by the
Secured Parties to the Collateral Agent pursuant to the Credit Agreement and
the Intercreditor Agreement, and that the Collateral Agent has agreed to act
(and any successor Collateral Agent shall act) as such hereunder only on the
express conditions contained in such Article VIII. Any successor
Collateral Agent appointed pursuant to Article VIII of the Credit Agreement and
the Intercreditor Agreement shall be entitled to all the rights, interests and
benefits of the Collateral Agent hereunder.

[Signature Pages
Follow]

22

          IN
WITNESS WHEREOF, each of the Grantors and the Collateral Agent have executed
this Security Agreement as of the date first above written.

	
 

	
 

	
 

	
 

	
TENNANT COMPANY, as a Grantor

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
Name:

	
 

	
Title:

	
 

	
 

	
 

	
 

	
TENNANT SALES AND SERVICE COMPANY, as a Grantor

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
Name:

	
 

	
Title:

	
 

	
 

	
 

	
TENNANT HOLDINGS LLC, as a Grantor

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
Name:

	
 

	
Title:

Signature Page to
Pledge and Security Agreement

	
 

	
 

	
 

	
JPMORGAN CHASE BANK, N.A., as Collateral Agent

	
 

	
 

	
 

	
By: 

	
 

	
 

	
Name:

	
 

	
Title:

	
 

Signature Page to
Pledge and Security Agreement

ANNEX I

to

PLEDGE AND

SECURITY AGREEMENT

                    Reference
is hereby made to the Pledge and Security Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the “Agreement”),
dated as of March [__] 2009, made by each of TENNANT COMPANY, a Minnesota
corporation (the “Company”), the Subsidiaries of the Company listed on
the signature pages thereto (together with the Company, the “Initial
Grantors”, and together with any additional Subsidiaries, including the
undersigned, which become parties thereto by executing a Supplement in
substantially the form hereof, the “Grantors”), in favor of the
Collateral Agent. Capitalized terms used herein and not defined herein shall
have the meanings given to them in the Agreement. By its execution below, the
undersigned, [NAME OF NEW GRANTOR], a [__________] [corporation/limited
liability company/limited partnership] (the “New Grantor”) agrees to
become, and does hereby become, a Grantor under the Agreement and agrees to be
bound by the Agreement as if originally a party thereto. By its execution
below, the undersigned represents and warrants as to itself that all of the
representations and warranties contained in the Agreement are true and correct
in all respects as of the date hereof. New Grantor represents and warrants that
the supplements to the Exhibits to the Agreement attached hereto are true and
correct in all respects as to the New Grantor and such supplements set forth
all information required to be scheduled under the Agreement with respect to the
New Grantor. New Grantor shall take all steps necessary and required under the
Agreement to perfect, in favor of the Collateral Agent, a first-priority
security interest in and lien against New Grantor’s Collateral.

                    IN
WITNESS WHEREOF, the New Grantor has executed and delivered this Annex I
counterpart to the Agreement as of this ___________ day of ____________, 20___.

	
 

	
 

	
 

	
 

	
[NAME OF NEW GRANTOR]

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	
 

	
Title: 

	
 

1EXHIBIT
4.3

      

       

      
        	
                

              	
                 1(6)

              

      

       

    

     

    

      

       

      TERMS
AND CONDITIONS OF THE NOKIA PERFORMANCE SHARE PLAN 2009

      

       

      
        
          	
                  1. 

                	
                  Purpose
      and Scope of the Plan

                

        

      

       

      The purpose of the
Nokia Performance Share Plan 2009 is to retain Nokia employees on a long-term
basis, to promote employees’ long-term commitment, and to compensate them for
performance measured on a long-term basis. To accomplish these objectives Nokia
may grant eligible Nokia Group employees Nokia Shares under this
Plan.

       

      The Plan is tied
directly to the performance of Nokia Group. For the purposes of this Plan,
performance is measured through growth and profitability. The compensation to
the employees under the Plan becomes payable and the financial benefits of the
Plan materialize only if the pre-determined performance levels, measured by
Average Annual Net Sales Growth and Earnings Per Share (EPS), are achieved by
the end of the Performance Period.

       

      Under the Plan a
maximum of 9 000 000 Performance Shares may be granted, which may result in
the settlement of 18 000 000 Shares at the maximum. The Board determines
the general guidelines under the Plan and approves the grants of Performance
Shares to eligible employees within its authorities. Grants of Performance
Shares under these terms and conditions may be made between January 1, 2009 and
December 31, 2009, inclusive.

       

      
        
          	
                  2. 

                	
                  Definitions

                

        

      

       

      Average Annual
Net Sales Growth: Average Annual Net Sales Growth is an average of the
annual net sales growth rates in the consolidated profit and loss accounts for
Nokia Group (non-IFRS) during the Performance Period.

       

      Board:
Board of Directors of Nokia Corporation.

       

      EPS: Earnings per share
(diluted, non-IFRS) at the end of the Performance Period in the consolidated
profit and loss accounts for Nokia Group (non-IFRS).

       

      Grant
Amount: The number of Performance Shares granted to a
Participant.

       

      Nokia:
Nokia Corporation.

       

      Maximum
Number: The
number of Performance Shares to be settled if the maximum performance is achieved with
respect to each of the performance criteria separately as defined under
paragraph 4.2. The Maximum Number equals two times the Grant Amount. One half of
the Maximum Number is tied to EPS and one half of the Maximum Number is tied to
Average Annual Net Sales Growth.

       

      Participant: Employee of Nokia Group who
has received a grant of Performance Shares under the Plan.

       

      Performance
Share/Shares: The Grant Amount consists of Performance Shares. Each
Performance Share represents a right to receive certain number of Shares or its
cash equivalent upon settlement, subject to the fulfillment of the conditions
under paragraph 4, and provided that no other restriction related to these terms
and conditions is applicable.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          	
                  

                	
                   2(6)

                

        

         

         

        

          

        

      

      Performance
Period: The three fiscal years starting on January 1, 2009 and ending on
December 31, 2011.

       

      Plan: Performance Share Plan
2009 of Nokia.

       

      Settlement Date:
A banking day in Helsinki, Finland falling as soon as practicable after
the end of the Performance Period, as determined by Nokia.

       

      Share/Shares:
Nokia ordinary shares. What is said about Shares under these terms and
conditions shall apply (as applicable) to their cash equivalent used for
settlement.

       

      Threshold Number:
The number of Performance Shares to be settled, if the threshold
performance is
achieved with respect to one performance criterion as defined under paragraph
4.2. Each Threshold Number equals one quarter (1/4) of the Grant Amount. One
Threshold Number is tied to EPS, and another is tied to Average Annual Net Sales
Growth.

       

      
        
          	
                  3. 

                	
                  Grant
      of Performance Shares

                

        

      

       

      At grant, each
Participant will receive a Grant Amount of Performance Shares. Nokia will notify
each Participant of the grant.

       

      As a precondition
for a valid grant, the Participant has to be employed by Nokia at the time of
the grant. The Participant may be required to give Nokia such authorizations and
consents, as Nokia deems necessary in order to administer the Plan.

       

      
        
          	
                  4.

                	
                  Financial
      Performance Criteria

                

        

      

       

      
        
          
            	
                    4.1 

                  	
                    General
      Principles

                  

          

        

      

       

      Measurement of
Nokia’s performance during the Performance Period will be based on the
consolidated profit and loss accounts of Nokia Group (non-IFRS) as of December
31, 2011, compared to the consolidated profit and loss accounts of Nokia Group
(non-IFRS) for 2008.

       

      The two
pre-determined financial performance criteria under the Plan are Average Annual
Net Sales Growth and EPS. Average Annual Net Sales Growth is calculated as an
average of the net sales growth rates for the years 2009 through
2011.

       

      
        
          	
                  4.2.

                	
                  Threshold
      Performance and Maximum
Performance

                

        

      

       

      Threshold (i.e.
minimum) performance levels and maximum performance levels are defined for each
performance criteria as follows:

       

      
        	
                 
      

              	
                (a)

              	
                Average
      Annual Net Sales Growth during the Performance Period: -5% (threshold) and
      10% (maximum); and

              

      

       

      
        	
                 
      

              	
                (b)

              	
                EPS: EPS of
      EUR 1.01 (threshold) and EUR 1.53 (maximum) for
  2011.

              

      

      

      The number of
Performance Shares to be settled, if any, is determined independently with
respect to Average Annual Net Sales Growth and to EPS.

      

      If the threshold
performance for neither of the two performance criteria is reached, no
settlement will take place.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          	
                  

                	
                   3(6)

                

        

         

         

        

          

      

      If the threshold
performance level is achieved in respect of a performance criterion, the
Threshold Number of Performance Shares will be settled.

      

      To the extent the
threshold performance level is exceeded in respect of a performance criterion,
the number of Performance Shares to be settled will increase from the Threshold
Number up to the Maximum Number following a linear growth scale.

      

      The total number of
Performance Shares to be settled, if applicable, may not exceed two times the
Grant Amount.

       

      

      The following table
summarizes each performance criterion:

      

      
        	
                Performance
      Criterion

              	
                Threshold

                Performance

              	
                Maximum

                Performance

              	
                Potential
      range of

                Settlement

              
	
                EPS for
      2011

                (diluted,
      non-IFRS)

                 

              	
                EUR
      1.01

              	
                 

                EUR
      1.53

                 

              	
                Zero,
      or

                Threshold
      Number up to

                4 x Threshold
      Number

              
	
                Average
      Annual Net Sales growth  during

                Jan. 1, 2009
      – Dec. 31, 2011(non-IFRS)

              	
                -5%

              	
                 

                10%

                 

              	
                Zero,
      or

                Threshold
      Number up to

                4 x Threshold
      Number

              

      

      

      
        	
                5. 

              	
                Measurement
      and Calculation of Payout

              

      

       

      The measurement of
Nokia’s performance shall be made after the end of the Performance Period. Based
on this measurement, the number of Performance Shares to be settled as Shares or
the equivalent amount of cash shall be calculated.

       

      Nokia shall carry
out the measurement and calculation in its sole discretion.

       

      The calculation of
the number of Performance Shares to be settled shall not result in fractional
Shares. The number of Shares shall be rounded to the nearest whole
Share.

       

      
        	
                6. 

              	
                Settlement

              

      

       

      On the Settlement
Date, Nokia will complete the settlement by transferring applicable number of
Shares, or their equivalent value in cash, to the Participant’s book-entry,
brokerage or other bank account, as applicable, provided that the Participant
has complied with these terms and conditions and performed all necessary actions
to enable Nokia to instruct the settlement. If the Participant has not performed
all necessary actions to enable Nokia to instruct the settlement, Nokia may, in
its sole discretion, sell the Shares on behalf of the Participant and remit the
proceeds to the Participant.

      

      The Settlement Date
cannot be earlier than the first banking day immediately following the day of
the announcement of Nokia’s annual results for the fiscal year
2011.

       

      Nokia may, in its
sole discretion, use for the settlement of Performance Shares one or more of the
following: newly issued Shares, Nokia’s own existing Shares (treasury Shares),
Shares purchased from the open market, or, in lieu of Shares, cash
settlement.

       

      The participants
shall not be entitled to any dividend or have any voting rights or any other
shareholder rights until and unless the Shares have been transferred to the
Participant.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          	
                  

                	
                   4(6)

                

        

         

         

        

          

        

      

      
        	
                7. 

              	
                Changes
      in Employment

              

      

       

      If the employment
of the Participant with Nokia Group terminates prior to the end of the
Performance Period by the reason of early retirement, retirement, permanent
disability (as defined by Nokia at its sole discretion) or death, the
Participant retains the right to settlement. In case of death of the Participant
prior to the close of the Performance Period, Nokia has the right to settle the
Performance Shares at the Grant Amount prior to the end of the Performance
Period. If made, such special settlement will constitute full and final
settlement of that Performance Share grant.

       

      If the employment
of the Participant with Nokia Group terminates prior to the end of the
Performance Period for any other reason than those mentioned above, Nokia is
entitled to redeem the Performance Share grant from the Participant without
consideration, in which case the Participant shall
not be entitled to any settlement under these terms and conditions.

       

      In cases of
voluntary and/or statutory leave of absence of the Participant, Nokia has the
right to prorate the settlement.

       

      
        	
                8. 

              	
                Terms
      of Employment

              

      

      

      The grant or
settlement of Performance Shares does not constitute a term or a condition of
the Participant’s employment contract with Nokia under applicable local laws.
The Performance Shares, Shares or their cash equivalent under the Plan do not
form a part of the Participant’s salary or benefit of any kind.

      

      

      
        	
                9. 

              	
                Taxes
      and other Obligations

              

      

      

      The Participants
are personally responsible for all taxes and social security charges associated
with the Performance Share grants and Shares delivered upon settlement. This
includes responsibility for any and all tax liabilities in multiple countries,
if the participant has resided in more than one country during the Performance
Period. The Participants are advised to consult their own financial and tax
advisers (at their own expense) before accepting the grant in order to verify
their tax position.

      

      The Participants
are also responsible for any potential charges debited by financial institutions
in connection with the settlement of the Performance Shares or any subsequent
transactions related to the Shares.

      

      Pursuant to
applicable laws, Nokia is or may be required or may deem it appropriate to
withhold taxes, social security charges or fulfil employment related and other
obligations upon grant or settlement of Performance Shares, or when the Shares
are disposed of by the Participants. Nokia shall have the right to determine how
such collection, withholding or other measures will be arranged or carried out,
including but not limited to a settlement of a net amount remaining after the
completion of such measures or potential sale of the Shares on behalf of the
Participants for the completion of such measures.

      

      
        	
                10. 

              	
                Breach
      of these Terms and Conditions

              

      

      

      The Participant
shall comply with these terms and conditions, as well as any instructions given
by Nokia regarding the Plan from time to time. If the Participant breaches these
terms and conditions and/or any instructions given by Nokia, Nokia may at its
discretion, at any time prior to settlement, rescind the grant of Performance
Shares.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          	
                  

                	
                   5(6)

                

        

         

        

          

      

      
        	
                11. 

              	
                Validity
      of these Terms and Conditions

              

      

       

      These terms and
conditions shall become valid and effective upon the approval by the Board. The
Board may at any time amend, modify or terminate these terms and conditions. The
Board may make such a resolution in its absolute discretion at any
time.

      

      Such action by the
Board may also, as in each case is determined by the Board affect the
Performance Shares that are then outstanding, but not settled.

      

      
        
          	
                  12. 

                	
                  Administration

                

        

      

       

      The Plan shall be
administered on behalf of Nokia in accordance with the general guidelines
approved by the Board. Nokia has the authority to interpret these terms and
conditions, approve such other rules and procedures and take such other
measures, as it shall deem necessary or appropriate for the administration of
the Plan. Such action may also affect the Performance Shares then outstanding,
but not settled.

      

      Nokia has the right
to determine the practical manner of administration and settlement of the
Performance Shares, including but not limited to the acquisition, issuance,
sale, and transfer of the Shares or their cash equivalent to the Participant.
Furthermore, Nokia has the right to require from the Participant the submission
of such information or contribution that is necessary for the administration and
settlement of the Performance Share grants.

      

      
        	
                13. 

              	
                Governing
      Law and Settlement of Disputes

              

      

       

      These terms and
conditions are governed by Finnish laws. Disputes arising out of these terms and
conditions shall be settled by arbitration in Helsinki, Finland in accordance
with the Arbitration Rules of the Finnish Central Chamber of
Commerce.

      

      
        	
                14. 

              	
                Processing
      of personal data

              

      

       

      Nokia has the right to transfer
globally within Nokia Group and/or to an agent of Nokia Group any of the
personal data required for the administration of the Plan and the settlement of
the Performance Shares. The data may be administered and processed either by
Nokia or an agent authorized by Nokia in the future. The Participant is entitled
to request access to data referring to the Participant’s person, held by Nokia
or its agent and to request amendment or deletion of such data in accordance
with applicable laws, statutes or regulations. In order to exercise these
rights, the Participant must contact Nokia Corporate Legal department in Espoo,
Finland.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          	
                  

                	
                   6(6)

                

        

         

        

          

        SUPPLEMENT
TO THE GRANT OF PERFORMANCE SHARES UNDER

         THE
NOKIA PERFORMANCE SHARE PLAN 2009 IN USA

         

        Amendments
to the Nokia Performance Share Plan 2009

         

        For
purposes of Section 409A of the U.S. Internal Revenue Code of 1986, as amended
(the “Code”),
the Nokia Performance Share Plan 2009 (“Plan”)
is amended, effective as of March 5, 2009, by adding the following “Code Section
409A Schedule” to the Plan.

         

        “Code
Section 409A Schedule”

         

        Notwithstanding
anything in the terms and conditions of the Plan (“Plan
Rules”) to the contrary, effective as of March 5, 2009, the Plan Rules
are amended as set forth in this Code Section 409A Schedule in order to avoid
adverse or unintended tax consequences to Participants under Section 409A of the
Code, and the applicable rules and regulations thereunder.  The
provisions of this Code Section 409A Schedule shall apply to granted Performance
Shares that are, or could potentially be, subject to Section 409A of the Code,
and shall supersede the other Plan Rules to the extent necessary to eliminate
inconsistencies between this Code Section 409A Schedule and such other Plan
Rules.

         

        1.           The
Settlement Date shall be the first banking day immediately following the day of
the announcement of Nokia’s annual results for the fiscal year
2011.

         

        2.           In
cases of voluntary and/or statutory leave of absence of the Participant, the
length of which exceeds the threshold determined for the relevant type of leave
in the applicable human resources policy at the time of the leave, Nokia will
prorate and settle the Participant’s Performance Shares on the Settlement
Date.

         

        3.           In
the event that the Participant’s employment terminates by reason of retirement,
early retirement, or permanent disability prior to the end of the Performance
Period, the Participant will retain the right to settlement of the Performance
Shares on the Settlement Date.  In the event that a Participant’s
employment terminates due to death, Nokia will settle the Participant’s
Performance Shares at the Grant Amount in the second month of the calendar
quarter following the date of the Participant’s death.

         

        4.           If
any Plan Rule or grant document contravenes any regulations or guidance
promulgated under Section 409A of the Code or could cause any granted
Performance Shares to be subject to taxes, interest or penalties under Section
409A of the Code, Nokia may, in its sole discretion and without the
Participant’s consent, modify the Plan Rules or grant documents to: (i) comply
with, or avoid being subject to, Section 409A of the Code, (ii) avoid the
incurrence of additional taxes, interest or penalties under Section 409A of the
Code, and (iii) maintain, to the maximum extent practicable, the original intent
of the applicable Plan Rule or provision without contravening the provisions of
Section 409A of the Code.

         

        *  *  *  *  *

         

        Except as
set forth herein, the Nokia Performance Share Plan 2009 remains in full force
and effect.

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