Document:

exv10w13

 

Exhibit 10.13

PLEDGE AND SECURITY AGREEMENT

     THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, the
“Security Agreement”) is entered into as of February 27, 2007 by and between Superior
Offshore International, L.L.C., a Louisiana limited liability company (the “Grantor”), and
JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative
Agent”) for the lenders party to the Credit Agreement referred to below.

PRELIMINARY STATEMENT

     The Grantor, the Administrative Agent, the Loan Parties and the Lenders are entering into a
Credit Agreement dated as of February 27, 2007 (as it may be amended or modified from time to time,
the “Credit Agreement”).

     The Grantor is entering into this Security Agreement in order to induce the Lenders to enter
into and extend credit to the Grantor under the Credit Agreement and to secure the Secured
Obligations.

     ACCORDINGLY, the Grantor and the Administrative Agent, on behalf of the Lenders, hereby agree
as follows:

ARTICLE I

DEFINITIONS

     1.1 Terms Defined in 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.

     “Closing Date” means the date of the Credit Agreement.

     “Collateral” shall have the meaning set forth in Article II.

     “Collateral Access Agreement” means any landlord waiver or other agreement, in form
and substance satisfactory to the Administrative Agent, between the Administrative Agent and any
third party (including any bailee, consignee, customs broker, or other similar Person) in
possession of any Collateral or any landlord of any Loan Party for any real property where any
Collateral is located, as such landlord waiver or other agreement may be amended, restated, or
otherwise modified from time to time.

 

     “Collateral Account Agreement” means the Collateral Account Agreement executed and
delivered by the Borrower and the Term Loan Administrative Agent in connection with the Term Loan
Agreement.

     “Collateral Deposit Account” shall have the meaning set forth in Section
7.1(a).

     “Collateral Report” means any certificate (including any Borrowing Base Certificate),
report or other document delivered by the Grantor to the Administrative Agent or any Lender with
respect to the Collateral pursuant to any Loan Document.

     “Collection Account” shall have the meaning set forth in Section 7.1(b).

     “Commercial Tort Claims” shall have the meaning set forth in Article 9 of the UCC.

     “Contracts” means, collectively, all of the Grantor’s rights and remedies under, and
all moneys and claims for money due or to become due to the Grantor under any material contracts,
and any and all amendments, supplements, extensions, and renewals thereof including all rights and
claims of the Grantor now or hereafter existing: (a) under any insurance, indemnities, warranties,
and guarantees provided for or arising out of or in connection with any of the foregoing
agreements; (b) for any damages arising out of or for breach or default under or in connection with
any of the foregoing contracts; (c) to all other amounts from time to time paid or payable under or
in connection with any of the foregoing agreements; or (d) to exercise or enforce any and all
covenants, remedies, powers and privileges thereunder.

     “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 renewals 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 any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

     “Deposit Account Control Agreement” means an agreement, in form and substance
satisfactory to the Administrative Agent, among any Loan Party, a banking institution holding such
Loan Party’s funds, and the Administrative Agent with respect to collection and control of all
deposits and balances held in a deposit account maintained by any Loan Party with such banking
institution.

     “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.

     “Event of Default” means an event described in Section 5.1.

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

     “Fixtures” 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.

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

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

     “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.

     “Lenders” means the lenders party to the Credit Agreement and their successors and
assigns.

     “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 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.

     “Lock Boxes” shall have the meaning set forth in Section 7.1(a).

     “Lock Box Agreements” shall have the meaning set forth in Section 7.1(a).

     “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, renewals,
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 Collateral” means all Instruments, Securities and other Investment Property
of the Grantor, whether or not physically delivered to the Administrative Agent pursuant to this
Security Agreement.

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

     “Required Secured Parties” means (a) prior to an acceleration of the Obligations under
the Credit Agreement, the Required Lenders, (b) after an acceleration of the Obligations under the
Credit Agreement but prior to the date upon which the Credit Agreement has terminated by its terms
and all of the obligations thereunder have been paid in full, Lenders holding in the aggregate at
least a majority of the total of the Aggregate Credit Exposure, and (c) after the Credit Agreement
has terminated by its terms and all of the Obligations thereunder have been paid in full (whether
or not the Obligations under the Credit

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Agreement were ever accelerated), Lenders holding in the aggregate at least a majority of the
aggregate net early termination payments and all other amounts then due and unpaid from the Grantor
to the Lenders under Swap Agreements, as determined by the Administrative Agent in its reasonable
discretion.

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

     “Security” has the meaning set forth in Article 8 of the UCC.

     “Stock Rights” means all dividends, instruments or other distributions and any other
right or property which the Grantor shall receive or shall become entitled to receive for any
reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest
constituting Collateral, any right to receive an Equity Interest and any right to receive earnings,
in which the Grantor now has or hereafter acquires any right, issued by an issuer of such Equity
Interest.

     “Supporting Obligations” 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 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.

     “UCC” means the Uniform Commercial Code, as in effect from time to time, of the State
of Texas or of any other state the laws of which are required as a result thereof to be applied in
connection with the attachment, perfection or priority of, or remedies with respect to,
Administrative Agent’s or any Lender’s Lien on any Collateral.

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

ARTICLE II

GRANT OF SECURITY INTEREST

     The Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and
for the ratable benefit of the Lenders, a security interest in all of its right, title and interest
in, to and under all personal property and other assets, whether now owned by or owing to, or
hereafter acquired by or arising in favor of the Grantor (including under any trade name or
derivations thereof), and whether owned or consigned by or to, or leased from or to, the Grantor,
and regardless of where located (all of which will be collectively referred to as the
“Collateral”), including:

	 	(i)	 	all Accounts;
	 
	 	(ii)	 	all Chattel Paper;
	 
	 	(iii)	 	all Copyrights, Patents and Trademarks;

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	 	(iv)	 	all Documents;
	 
	 	(v)	 	all Equipment;
	 
	 	(vi)	 	all Fixtures;
	 
	 	(vii)	 	all General Intangibles;
	 
	 	(viii)	 	all Goods;
	 
	 	(ix)	 	all Instruments;
	 
	 	(x)	 	all Inventory;
	 
	 	(xi)	 	all Investment Property;
	 
	 	(xii)	 	all cash or cash equivalents;
	 
	 	(xiii)	 	all Letter-of-Credit Rights and Supporting Obligations;
	 
	 	(xiv)	 	all Deposit Accounts with any bank or other financial institution;
	 
	 	(xv)	 	all Commercial Tort Claims;
	 
	 	(xvi)	 	all Contracts;
	 
	 	(xvii)	 	and all accessions to, substitutions for and replacements, proceeds
(including Stock Rights), insurance proceeds and products of the
foregoing, together with all books and records, customer lists, credit
files, computer files, programs, printouts and other computer materials
and records related thereto and any General Intangibles at any time
evidencing or relating to any of the foregoing;

to secure the prompt and complete payment and performance of the Secured Obligations;
provided, however, that notwithstanding any of the other provisions set forth in
this Section 2, this Agreement shall not constitute a grant of a security interest in (i)
any property to the extent that such grant of a security interest is prohibited by any Requirements
of Law of a Governmental Authority, requires a consent not obtained of any Governmental Authority
pursuant to such Requirement of Law or is prohibited by, or constitutes a breach or default under
or results in the termination of or requires any consent not obtained under, any contract, license,
agreement, instrument, or other document evidencing or giving rise to such property or, in the case
of any Investment Property or Pledged Collateral, any applicable shareholder agreement or similar
agreement, except to the extent that such Requirement of Law or the term in such contract, license,
agreement, instrument or other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is ineffective under
applicable law, (ii) Deposit Accounts exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of any of the Grantor’s employees, (iii)
the “Collateral” as defined in the Collateral Account Agreement and (iv) equity interests in excess
of 66% of the total outstanding equity interests of any foreign Subsidiary of the Grantor.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

     The Grantor represents and warrants to the Administrative Agent and the Lenders that:

     3.1 Title, Perfection and Priority. The Grantor has good and valid rights in or the
power to transfer the Collateral 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(e), and has full power and authority to grant to the Administrative Agent
the security interest in such Collateral pursuant hereto. When financing statements have been
filed in the appropriate offices against the Grantor in the locations listed on Exhibit H,
the Administrative Agent will have a fully perfected first priority security interest in that
Collateral in which the Administrative Agent is to have a first priority security interest and a
fully perfected second priority security interest in that Collateral over which the Administrative
Agent is to have a second priority security interest (as set forth more fully in the Intercreditor
Agreement), in each case, in which a security interest may be perfected by filing, subject only to
Liens permitted under Section 4.1(e); provided that no representations are made
herein with respect to the requirements of any laws of any jurisdiction other than the United
States or any State thereof.

     3.2 Type and Jurisdiction of Organization, Organizational and Identification Numbers.
The type of entity of the Grantor, its state of organization, the organizational number issued to
it by its state of organization and its federal employer identification number are set forth on
Exhibit A.

     3.3 Principal Location. The 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), are disclosed in Exhibit A; the Grantor has no other places of business except
those set forth in Exhibit A.

     3.4 Collateral Locations. As of the date hereof, all of Grantor’s locations where
Collateral is located are listed on Exhibit A. All of said locations are owned by the
Grantor except for locations (i) which are leased by the Grantor as lessee and designated in
Part VII(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 as designated in Part VII(c) of
Exhibit A.

     3.5 Deposit Accounts. All of the Grantor’s Deposit Accounts are listed on Exhibit
B.

     3.6 Exact Names. The Grantor’s name in which it has executed this Security Agreement
is the exact name as it appears in the Grantor’s organizational documents, as amended, as filed
with the Grantor’s jurisdiction of organization. The Grantor has not, during the past five years,
been known by or used any other corporate or fictitious name, or been a party to any merger or
consolidation, or been a party to any acquisition except as previously disclosed to the
Administrative Agent in writing.

     3.7 Letter-of-Credit Rights and Chattel Paper. Exhibit C lists all
Letter-of-Credit Rights and Chattel Paper of the Grantor as of the date hereof. All action by the
Grantor necessary or desirable to protect and perfect the Administrative Agent’s Lien on each item
listed on Exhibit C (including the delivery of all originals and the placement of a legend
on all Chattel Paper as required hereunder) has been duly taken. The Administrative Agent will have
(i) with respect to Chattel Paper related to Term Priority Collateral (as defined in the
Intercreditor Agreement), a fully perfected second priority security interest (which security
interest shall be second in priority only to security interests in favor of the Term Loan Agent,
for the benefit of the Term Loan Lenders, and as set forth more fully in the Intercreditor
Agreement) and (ii) with respect to all other Chattel Paper and Letter-of-Credit Rights, a fully
perfected first priority security interest in the Collateral listed on Exhibit C, in each
case subject only to Liens permitted under Section 4.1(e).

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     3.8 Accounts and Chattel Paper.

          (a) The names of the obligors, amounts owing, due dates and other information with respect to
the Accounts and Chattel Paper are and will be correctly stated in all material respects in all
records of the Grantor relating thereto and in all invoices and Collateral Reports with respect
thereto furnished to the Administrative Agent by the Grantor from time to time. As of the time
when each Account or each item of Chattel Paper arises, the 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 material respects what they purport to be.

          (b) With respect to Accounts, except as specifically disclosed on the most recent Collateral
Report, (i) all Accounts are Eligible Accounts; (ii) all Accounts represent bona fide sales of
Inventory or rendering of services to Account Debtors in the ordinary course of the Grantor’s
business and are not evidenced by a judgment, Instrument (except for a check or other Instrument
for the immediate payment of money) or Chattel Paper; (iii) there are no setoffs, claims or
disputes existing or asserted with respect thereto and the Grantor has not made any agreement with
any Account Debtor for any extension of time for the payment thereof, any compromise or settlement
for less than the full amount thereof, any release of any Account Debtor from liability therefor,
or any deduction therefrom except as allowed by Grantor in the ordinary course of its business and
in accordance with its past practice; (iv) to Grantor’s knowledge, there are no facts, events or
occurrences which in any way impair the validity or enforceability thereof or could reasonably be
expected to reduce the amount payable thereunder as shown on the Grantor’s books and records and
any invoices, statements and Collateral Reports with respect thereto; (v) the Grantor has not
received any notice of proceedings or actions which are threatened or pending against any Account
Debtor which might result in any adverse change in such Account Debtor’s financial condition; and
(vi) the Grantor has no knowledge that any Account Debtor is unable generally to pay its debts as
they become due.

          (c) In addition, with respect to all Accounts, (i) the amounts shown on all invoices,
statements and Collateral Reports with respect thereto are actually and absolutely owing to the
Grantor as indicated thereon and are not in any way contingent; (ii) no payments have been or shall
be made thereon except payments promptly delivered to a Lock Box or a Collateral Deposit Account as
required pursuant to Section 7.1; and (iii) to the Grantor’s knowledge, all Account Debtors
have the capacity to contract.

     3.9 Inventory. (a) All Inventory (other than Inventory in transit) is located at one
of the Grantor’s locations set forth on Exhibit A or as otherwise notified to
Administrative Agent in writing, (b) no Inventory (other than Inventory in transit) is now, or
shall at any time or times hereafter be stored at any other location except as permitted by
Section 4.1(g), (c) the Grantor has good and merchantable title to such Inventory (other
than obsolete or returned Inventory) and such Inventory is not subject to any Lien or security
interest or document whatsoever except for the Lien granted to the Administrative Agent, for the
benefit of the Administrative Agent and Lenders, and except for Permitted Encumbrances, (d) such
Inventory (other than obsolete or returned Inventory) is of good and merchantable quality, free
from any defects, (e) such Inventory is not subject to any licensing, patent, royalty, trademark,
trade name or copyright agreements with any third parties which would require any consent of any
third party upon sale or disposition of that Inventory or the payment of any monies to any third
party upon such sale or other disposition, (f) such Inventory has been produced in accordance with
the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders
thereunder and (g) the completion of manufacture, sale or other disposition of such Inventory by
the Administrative Agent following an Event of Default shall not require the consent of any Person
and shall not constitute a breach or default under any contract or agreement to which the Grantor
is a party or to which such property is subject.

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     3.10 Intellectual Property. The Grantor does not have any interest in, or title to,
any Patent, Trademark or Copyright except as set forth in Exhibit D or as otherwise
notified to Administrative Agent in writing. This Security Agreement is effective to create a
valid and continuing Lien and, upon filing of appropriate financing statements in the offices
listed on Exhibit H and this Security Agreement with the United States Copyright Office and
the United States Patent and Trademark Office, fully perfected security interests (which security
interest shall be junior in priority only to security interests in favor of the Term Loan Agent,
for the benefit of the Term Loan Lenders, and as set forth more fully in the Intercreditor
Agreement) in favor of the Administrative Agent on the Grantor’s Patents, Trademarks and
Copyrights. Subject to Section 4.1(e), such perfected security interests are enforceable
as such as against any and all creditors of and purchasers from the Grantor; and all action
necessary or desirable to protect and perfect the Administrative Agent’s Lien on the Grantor’s
Patents, Trademarks or Copyrights shall have been duly taken.

     3.11 Filing Requirements. None of the Equipment is covered by any certificate of
title, except for vehicles. None of the Collateral is of a type for which security interests or
liens may be perfected by filing under any federal statute except for (a) vehicles and (b) Patents,
Trademarks and Copyrights held by the Grantor and described in Exhibit D. The legal
description, county and street address of each property on which any Fixtures are located as of the
date hereof is set forth in Exhibit F or as otherwise notified to Administrative Agent in
writing together with the name and address of the record owner of each such property.

     3.12 No Financing Statements, Security Agreements. No financing statement or security
agreement describing all or any portion of the Collateral which has not lapsed or been terminated
naming the Grantor as debtor has been filed or is of record in any jurisdiction except (a) for
financing statements or security agreements naming the Administrative Agent on behalf of the
Lenders as the secured party and (b) those filed in connection with, or evidencing, liens permitted
by Section 4.1(e).

     3.13 Pledged Collateral.

          (a) Exhibit G sets forth a complete and accurate list of all of the Pledged
Collateral. The Grantor is the direct, sole beneficial owner and sole holder of record of the
Pledged Collateral listed on Exhibit G as being owned by it, free and clear of any Liens,
except for the security interest granted to the Administrative Agent for the benefit of the Lenders
hereunder and Liens permitted under Section 4.1(e). The Grantor further represents and
warrants that (i) all Pledged Collateral constituting an Equity Interest has been (to the extent
such concepts are relevant with respect to such Pledged Collateral) duly authorized, validly
issued, are fully paid and non-assessable, (ii) with respect to any certificates delivered to the
Administrative Agent representing an Equity Interest, either such certificates are Securities as
defined in Article 8 of the UCC as a result of actions by the issuer or otherwise, or, if such
certificates are not Securities, the Grantor has so informed the Administrative Agent so that the
Administrative Agent may take steps to perfect its security interest therein as a General
Intangible, (iii) all Pledged Collateral held by a securities intermediary is covered by a control
agreement among the Grantor, the securities intermediary and the Administrative Agent pursuant to
which the Administrative Agent has Control and (iv) all Pledged Collateral which represents
Indebtedness owed to the Grantor has been duly authorized, authenticated or issued and delivered by
the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing, and such issuer is not in default thereunder.

          (b) In addition, (i) none of the Pledged Collateral has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws of any jurisdiction
to which

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such issuance or transfer may be subject, (ii) there are existing no options, warrants, calls
or commitments of any character whatsoever relating to the Pledged Collateral or which obligate the
issuer of any Equity Interest included in the Pledged Collateral to issue additional Equity
Interests, and (iii) no consent, approval, authorization, or other action by, and no giving of
notice, filing with, any governmental authority or any other Person is required for the pledge by
the Grantor of the Pledged Collateral pursuant to this Security Agreement or for the execution,
delivery and performance of this Security Agreement by the Grantor, or for the exercise by the
Administrative Agent of the voting or other rights provided for in this Security Agreement or for
the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as
may be required in connection with such disposition by laws affecting the offering and sale of
securities generally; provided that no representations are made herein with respect to the
requirements of any laws of any jurisdiction other than the United States or any State thereof.

          (c) Except as set forth in Exhibit G, the Grantor owns 100% of the issued and
outstanding Equity Interests which constitute Pledged Collateral and none of the Pledged
Collateral which represents Indebtedness owed to the Grantor is subordinated in right of payment to
other Indebtedness or subject to the terms of an indenture.

ARTICLE IV

COVENANTS

     From the date of this Security Agreement, and thereafter until this Security Agreement is
terminated in accordance with Section 8.14, the Grantor agrees that:

     4.1 General.

          (a) Collateral Records. The Grantor will maintain complete and accurate books and
records with respect to the Collateral, and furnish to the Administrative Agent, with sufficient
copies for each of the Lenders, such reports relating to the Collateral as the Administrative Agent
shall from time to time reasonably request.

          (b) Authorization to File Financing Statements; Ratification. The Grantor hereby
authorizes the Administrative Agent to file, and if requested will deliver to the Administrative
Agent, all financing statements and other documents and take such other actions as may from time to
time be requested by the Administrative Agent in order to maintain a first priority perfected
security interest in the Collateral over which the Administrative Agent is to have a first priority
perfected security interest and a second priority perfected security interest in the Collateral
over which the Administrative Agent is to have a second priority perfected security interest (in
each case, subject to Permitted Encumbrances) and, if applicable, Control of, the Collateral. Any
financing statement filed by the Administrative Agent may be filed in any filing office in any UCC
jurisdiction and may (i) indicate the Collateral (1) as all assets of the Grantor or words of
similar effect, regardless of whether any particular asset comprised in the Collateral falls within
the scope of Article 9 of the UCC or such jurisdiction, or (2) by any other description which
reasonably approximates the description contained in this Security Agreement, and (ii) contain any
other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office
acceptance of any financing statement or amendment, including (A) whether the Grantor is an
organization, the type of organization and any organization identification number issued to the
Grantor and (B) in the case of a financing statement filed as a fixture filing or indicating
Collateral as as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. The Grantor also agrees to furnish any such information
to the Administrative Agent promptly upon request. The Grantor also ratifies its authorization for
the Administrative Agent to have filed in any UCC jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.

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          (c) Further Assurances. The Grantor will, if so requested by the Administrative
Agent, furnish to the Administrative Agent, as often as the Administrative Agent requests,
statements and schedules further identifying and describing the Collateral and such other reports
and information in connection with the Collateral as the Administrative Agent may reasonably
request, all in such detail as the Administrative Agent may specify. The Grantor also agrees to
take any and all actions necessary to defend title to the Collateral against all persons and to
defend the security interest of the Administrative Agent in the Collateral and the priority thereof
against any Lien not expressly permitted hereunder.

          (d) Disposition of Collateral. The Grantor will not sell, lease or otherwise dispose
of the Collateral except for dispositions specifically permitted pursuant to Section 6.05 of the
Credit Agreement.

          (e) Liens. The Grantor will not create, incur, or suffer to exist any Lien on the
Collateral except (i) the security interest created by this Security Agreement, and (ii) other
Permitted Encumbrances.

          (f) Other Financing Statements. The Grantor will not authorize the filing of any
financing statement naming it as debtor covering all or any portion of the Collateral, except for
those filed in connection with Liens permitted by Section 4.1(e). The Grantor acknowledges
that it is not authorized to file any financing statement or amendment or termination statement
with respect to any financing statement without the prior written consent of the Administrative
Agent, subject to the Grantor’s rights under Section 9-509(d)(2) of the UCC.

          (g) Locations. The Grantor will not (i) maintain any Collateral at any location other
than those locations listed on Exhibit A or as otherwise notified to Administrative Agent
in writing, (ii) otherwise change, or add to, such locations without the Administrative Agent’s
prior written consent as required by the Credit Agreement (and if the Administrative Agent gives
such consent, the Grantor will concurrently therewith use commercially reasonable efforts to obtain
a Collateral Access Agreement for each such location to the extent required by the Credit
Agreement), or (iii) change its principal place of business or chief executive office from the
location identified on Exhibit A, other than as permitted by the Credit Agreement.

          (h) Compliance with Terms. The Grantor will perform and comply in all material
respects with all obligations in respect of the Collateral and all agreements to which it is a
party or by which it is bound relating to the Collateral.

     4.2 Receivables.

          (a) Certain Agreements on Receivables. The Grantor will not 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, except that, so long as no
Event of Default then exists, the Grantor may reduce the amount of Accounts arising from the sale
or lease of Inventory or providing of services in accordance with its present policies and in the
ordinary course of business.

          (b) Collection of Receivables. Except as otherwise provided in this Security
Agreement, the Grantor will collect and enforce, at the Grantor’s sole expense, all amounts due or
hereafter due to the Grantor under the Receivables.

          (c) Reserved.

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          (d) Disclosure of Counterclaims on Receivables. If (i) any discount, credit or
agreement to make a rebate or to otherwise reduce the amount owing on a Receivable in an amount
greater than $500,000 exists or (ii) if, to the knowledge of the Grantor, any dispute, setoff,
claim, counterclaim or defense in an amount greater than $500,000 exists or has been asserted or
threatened with respect to a Receivable, the Grantor will promptly disclose such fact to the
Administrative Agent in writing. The Grantor shall send the Administrative Agent a copy of each
credit memorandum in excess of $500,000 as soon as issued, and the Grantor shall promptly report
each such credit memo and each of the facts required to be disclosed to the Administrative Agent in
accordance with this Section 4.2(d) on the Borrowing Base Certificates submitted by it.

          (e) Electronic Chattel Paper. The Grantor shall take all steps necessary to grant the
Administrative Agent Control of all electronic chattel paper in accordance with the UCC and all
“transferable records” as defined in each of the Uniform Electronic Transactions Act and the
Electronic Signatures in Global and National Commerce Act; provided, that the Grantor shall not be
obligated to grant to the Administrative Agent Control of any electronic chattel paper to the
extent that (a) the aggregate face amount of all such chattel paper held by the Grantor at such
time does not exceed $250,000, and (b) the face amount of any individual chattel paper held by the
Grantor at such time does not exceed $150,000.

     4.3 Inventory and Equipment.

          (a) Maintenance of Goods. The Grantor will do all things reasonably necessary to
maintain, preserve, protect and keep the Inventory and the Equipment in good repair and working and
saleable condition, except for damaged or defective goods arising in the ordinary course of the
Grantor’s business and except for ordinary wear and tear in respect of the Equipment.

          (b) Returned Inventory. In the event any Account Debtor returns Inventory to the
Grantor when an Event of Default exists, the Grantor, upon the request of the Administrative Agent,
shall: (i) hold the returned Inventory in trust for the Administrative Agent; (ii) segregate all
returned Inventory from all of its other property; (iii) dispose of the returned Inventory solely
according to the Administrative Agent’s written instructions; and (iv) not issue any credits or
allowances with respect thereto without the Administrative Agent’s prior written consent. All
returned Inventory shall be subject to the Administrative Agent’s Liens thereon. Whenever any
Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount
owing by the Account Debtor with respect to such returned Inventory.

          (c) Inventory Count. The Grantor will conduct a physical count of the Inventory at
least once per Fiscal Year, and after and during the continuation of an Event of Default, at such
other times as the Administrative Agent requests. The Grantor, at its own expense, shall deliver to
the Administrative Agent the results of each physical verification, which the Grantor has made, or
has caused any other Person to make on its behalf, of all or any portion of its Inventory.

          (d) Equipment. The Grantor shall not permit any Equipment to become a fixture with
respect to real property or to become an accession with respect to other personal property with
respect to which real or personal property the Administrative Agent does not have a Lien. The
Grantor will not, without the Administrative Agent’s prior written consent, alter or remove any
identifying symbol or number on any of the Grantor’s Equipment constituting Collateral.

     4.4 Delivery of Instruments, Securities, Chattel Paper and Documents. The Grantor
will (a) deliver to the Administrative Agent immediately upon execution of this Security Agreement
the originals of all Chattel Paper, Securities and Instruments constituting Collateral (if any then
exist),

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(b) hold in trust for the Administrative Agent upon receipt and immediately thereafter deliver
to the Administrative Agent any Chattel Paper, Securities and Instruments constituting Collateral,
(c) upon the Administrative Agent’s request, deliver to the Administrative Agent (and thereafter
hold in trust for the Administrative Agent upon receipt and immediately deliver to the
Administrative Agent) any Document evidencing or constituting Collateral and (d) upon the
Administrative Agent’s request, deliver to the Administrative Agent a duly executed amendment to
this Security Agreement, in the form of Exhibit I hereto (the “Amendment”),
pursuant to which the Grantor will pledge such additional Collateral; provided, that the Grantor
shall not be obligated to deliver to the Administrative Agent any such amendment or any Chattel
Paper, Securities, Instrument, Document held by the Grantor at any time to the extent that (i) the
aggregate face amount of all such Chattel Paper, Securities, Instruments and Documents held by the
Grantor at such time does not exceed $250,000 and (ii) the face amount of any individual Chattel
Paper, Security, Instrument or Document held by such Grantor at such time does not exceed $150,000.
The Grantor hereby authorizes the Administrative Agent to attach each Amendment to this Security
Agreement and agrees that all additional Collateral set forth in such Amendments shall be
considered to be part of the Collateral.

     4.5 Uncertificated Pledged Collateral. The Grantor will permit the Administrative
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 Pledged
Collateral not represented by certificates to mark their books and records with the numbers and
face amounts of all such uncertificated securities or other types of Pledged Collateral not
represented by certificates and all rollovers and replacements therefor to reflect the Lien of the
Administrative Agent granted pursuant to this Security Agreement. The Grantor will take any
actions necessary to cause (a) the issuers of uncertificated securities which are Pledged
Collateral and (b) any securities intermediary which is the holder of any Pledged Collateral, to
cause the Administrative Agent to have and retain Control over such Pledged Collateral. Without
limiting the foregoing, the Grantor will, with respect to Pledged Collateral held with a securities
intermediary, cause such securities intermediary to enter into a control agreement with the
Administrative Agent, in form and substance satisfactory to the Administrative Agent, giving the
Administrative Agent Control.

     4.6 Pledged Collateral.

          (a) Changes in Capital Structure of Issuers. The Grantor will not (i) permit or suffer
any issuer of an Equity Interest constituting Pledged Collateral to dissolve, merge, liquidate,
retire any of its Equity Interests or other Instruments or Securities evidencing ownership, reduce
its capital, sell or encumber all or substantially all of its assets (except for Permitted
Encumbrances, sales of assets permitted pursuant to Section 4.1(d) and mergers or
consolidations permitted under Section 6.03 of the Credit Agreement), or (ii) vote any Pledged
Collateral in favor of any of the foregoing.

          (b) Issuance of Additional Securities. The Grantor will not permit or suffer the
issuer of an Equity Interest constituting Pledged Collateral to issue additional Equity Interests,
any right to receive the same or any right to receive earnings, except to the Grantor.

          (c) Registration of Pledged Collateral. The Grantor will permit any registerable
Pledged Collateral to be registered in the name of the Administrative Agent or its nominee at any
time at the option of the Required Secured Parties.

          (d) Exercise of Rights in Pledged Collateral.

          (i) Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the Grantor of the Administrative Agent’s
intent

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to exercise its corresponding rights pursuant to Section 4.6(d)(ii), Grantor
shall be permitted to exercise all voting and corporate or other organizational rights with
respect to the Pledged Collateral; provided, however, that no vote shall be
cast or corporate or other organizational right exercised or other action taken which, in
the Administrative Agent’s reasonable judgment, would impair the Collateral or which would
be inconsistent with or result in any violation of any provision of the Credit Agreement,
this Security Agreement or any other Loan Document.

          (ii) The Grantor will permit the Administrative Agent or its nominee at any time after
the occurrence and during the continuance of an Event of Default, without notice, to
exercise all voting rights or other rights relating to Pledged Collateral, including,
without limitation, exchange, subscription or any other rights, privileges, or options
pertaining to any Equity Interest or Investment Property constituting Pledged Collateral as
if it were the absolute owner thereof.

          (iii) The Grantor shall be entitled to collect and receive for its own use all cash
dividends and interest paid in respect of the Pledged Collateral to the extent not in
violation of the Credit Agreement other than any of the following distributions and
payments (collectively referred to as the “Excluded Payments”): (A) dividends and
interest paid or payable other than in cash in respect of any Pledged Collateral, and
instruments and other property received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral; (B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital surplus or
paid-in capital of an issuer; and (C) cash paid, payable or otherwise distributed, in
respect of principal of, or in redemption of, or in exchange for, any Pledged Collateral;
provided however, that until actually paid, all rights to such distributions shall remain
subject to the Lien created by this Security Agreement; and

          (iv) All Excluded Payments and all other distributions in respect of any of the Pledged
Collateral, whenever paid or made, shall be delivered to the Administrative Agent to hold as
Pledged Collateral and shall, if received by the Grantor, be received in trust for the
benefit of the Administrative Agent, be segregated from the other property or funds of the
Grantor, and be forthwith delivered to the Administrative Agent as Pledged Collateral in the
same form as so received (with any necessary endorsement).

     4.7 Intellectual Property.

          (a) The Grantor will use its best efforts to secure all consents and approvals necessary or
appropriate for the assignment to or benefit of the Administrative Agent of any License necessary
to the conduct of its business as currently conducted held by the Grantor and to enforce the
security interests granted hereunder.

          (b) The Grantor shall notify the Administrative Agent immediately if it knows or has reason to
know that any application or registration relating to any Patent, Trademark or Copyright necessary
to the conduct of its business as currently conducted (now or hereafter existing) may become
abandoned or dedicated, or of any adverse determination or development (including the institution
of, or any such determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court) regarding the Grantor’s
ownership of any Patent, Trademark or Copyright, its right to register the same, or to keep and
maintain the same.

          (c) Whenever the Grantor, either directly or through any agent, employee, licensee or
designee, files an application for the registration of any Patent, Trademark or Copyright with the

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United States Patent and Trademark Office, the United States Copyright Office or any similar
office or agency, the Grantor shall report such filing to the Administrative Agent within five (5)
Business Days after the last day of the fiscal quarter in which such filing occurs. Upon request
of the Administrative Agent, the Grantor shall execute and deliver any and all security agreements
as the Administrative Agent may request to evidence the Administrative Agent’s second priority
security interest (which security interest shall be second in priority only to security interests
in favor of the Term Loan Agent, for the benefit of the Term Loan Lenders, and as set forth more
fully in the Intercreditor Agreement and other Permitted Encumbrances) in such Patent, Trademark or
Copyright, and the General Intangibles of the Grantor relating thereto or represented thereby.

          (d) The Grantor shall take all actions reasonably necessary to maintain and pursue each
application, to obtain the relevant registration and to maintain the registration of each of the
Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings, unless the Grantor shall reasonably determine that such
Patent, Trademark or Copyright is not necessary to the conduct of Grantor’s business.

          (e) The Grantor shall, unless it shall reasonably determine that such Patent, Trademark or
Copyright is not necessary to the conduct of its business as currently conducted, promptly sue for
infringement, misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and shall take such other actions as the Grantor shall
deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the
event that the Grantor institutes suit because any of the Patents, Trademarks or Copyrights
necessary to the conduct of its business as currently conducted constituting Collateral is
infringed upon, or misappropriated or diluted by a third party, the Grantor shall comply with
Section 4.8.

     4.8 Commercial Tort Claims. The Grantor shall promptly, and in any event within
thirty (30) days after the same is acquired by it, notify the Administrative Agent of any
commercial tort claim (as defined in the UCC) with a potential value in excess of $500,000 acquired
by it and, unless the Administrative Agent otherwise consents, the Grantor shall enter into an
amendment to this Security Agreement, in the form of Exhibit I hereto, granting to
Administrative Agent a second priority security interest in such commercial tort claim (which
security interest shall be second in priority only to security interests in favor of the Term Loan
Agent, for the benefit of the Term Loan Lenders, and as set forth more fully in the Intercreditor
Agreement).

     4.9 Letter-of-Credit Rights. If the Grantor is or becomes the beneficiary of a letter
of credit, not constituting a Supporting Obligation, the Grantor shall promptly, and in any event
within two Business Days after becoming a beneficiary, notify the Administrative Agent thereof and,
upon the request of the Administrative Agent during the continuation of an Event of Default, cause
the issuer and/or confirmation bank to (i) consent to the assignment of any Letter-of-Credit Rights
to the Administrative Agent and (ii) agree to direct all payments thereunder to a Deposit Account
at the Administrative Agent or subject to a Deposit Account Control Agreement for application to
the Secured Obligations, in accordance with Section 2.18 of the Credit Agreement, all in form and
substance reasonably satisfactory to the Administrative Agent.

     4.10 Federal, State or Municipal Claims. The Grantor will promptly notify the
Administrative Agent of any Collateral which constitutes a claim against the United States
government or any state or local government or any instrumentality or agency thereof in excess of
$100,000, the assignment of which claim is restricted by federal, state or municipal law.

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     4.11 No Interference. The Grantor agrees that it will not interfere with any right,
power and remedy of the Administrative Agent provided for in this Security Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of
the exercise by the Administrative Agent of any one or more of such rights, powers or remedies.

     4.12 Insurance. (a) In the event any Collateral is located in any area that has been
designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area”, the Grantor
shall purchase and maintain flood insurance on such Collateral (including any personal property
which is located on any real property leased by such Loan Party within a “Special Flood Hazard
Area”). The amount of all insurance required by this Section shall at a minimum comply with
applicable law, including the Flood Disaster Protection Act of 1973, as amended. All premiums on
such insurance shall be paid when due by the Grantor, and copies of the policies delivered to the
Administrative Agent. If the Grantor fails to obtain any insurance as required by this Section,
the Administrative Agent at the direction of the Required Lenders may obtain such insurance at the
Borrower’ expense.

          (b) All insurance policies required under Section 5.09 of the Credit Agreement shall name the
Administrative Agent (for the benefit of the Administrative Agent and the Lenders) as an additional
insured or as loss payee, as applicable, and shall contain loss payable clauses or mortgagee
clauses, through endorsements in form and substance satisfactory to the Administrative Agent, which
provide that: (i) all proceeds thereunder with respect to any Collateral that (A) is ABL Priority
Collateral (as defined in the Intercreditor Agreement) shall be payable to the Administrative Agent
and (B) is Term Priority Collateral (as defined in the Intercreditor Agreement) shall be payable to
the Administrative Agent in the event the Term Obligations Payment Date (as defined in the
Intercreditor Agreement) has occurred shall be payable to the Administrative Agent; (ii) no such
insurance shall be affected by any act or neglect of the insured or owner of the property described
in such policy; and (iii) such policy and loss payable or mortgagee clauses may be canceled or
terminated only upon at least thirty days prior written notice given to the Administrative Agent.

     4.13 Collateral Access Agreements. The Grantor shall use commercially reasonable
efforts to obtain a Collateral Access Agreement, from the lessor of each leased property, mortgagee
of owned property or bailee or consignee with respect to any warehouse, processor or converter
facility or other location where Collateral is stored or located, which agreement or letter shall
provide access rights, contain a waiver or subordination of all Liens or claims that the landlord,
mortgagee, bailee or consignee may assert against the Collateral at that location, and shall
otherwise be reasonably satisfactory in form and substance to the Administrative Agent. The
Grantor shall timely and fully pay and perform its obligations under all leases and other
agreements with respect to each leased location or third party warehouse where any Collateral is or
may be located.

     4.14 Deposit Account Control Agreements. The Grantor will provide to the
Administrative Agent upon the Administrative Agent’s request, a Deposit Account Control Agreement
duly executed on behalf of each financial institution holding a deposit account of the Grantor as
set forth in the Security Agreement; provided that, the Administrative Agent may, in its
discretion, defer delivery of any such Deposit Account Control Agreement, establish a Reserve with
respect to any deposit account for which the Administrative Agent has not received such Deposit
Account Control Agreement, and require the Grantor to open and maintain a new deposit account with
a financial institution subject to a Deposit Account Control Agreement. The Grantor shall not
permit the account balances of deposit accounts not subject to a Deposit Account Control Agreement
and maintained at financial institutions other than the Administrative Agent to, in the aggregate,
exceed $75,000.

     4.15 Change of Name or Location; Change of Fiscal Year. The Grantor shall not, except
as permitted by the Credit Agreement, and in any case, solely in connection with the IPO, (a)
change its

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name as it appears in official filings in the state of its incorporation or organization, (b)
change its chief executive office, principal place of business, mailing address, corporate offices
or warehouses or locations at which Collateral is held or stored, or the location of its records
concerning the Collateral as set forth in the Security Agreement, (c) change the type of entity
that it is, (d) change its organization identification number, if any, issued by its state of
incorporation or other organization, or (e) change its state of incorporation or organization, in
each case, unless the Administrative Agent shall have received at least thirty days prior written
notice of such change and the Administrative Agent shall have acknowledged in writing that either
(1) such change will not adversely affect the validity, perfection or priority of the
Administrative Agent’s security interest in the Collateral, or (2) any reasonable action requested
by the Administrative Agent in connection therewith has been completed or taken (including any
action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of
Lenders, in any Collateral), provided that, any new location shall be in the continental U.S. The
Grantor shall not change its fiscal year which currently ends on December 31.

     4.16 Contracts. Notwithstanding any provision hereof to the contrary, the Grantor
shall at all times remain liable to observe and perform all of its duties and obligations under its
Contracts, and the Administrative Agent’s or any Lender’s exercise of any of their respective
rights with respect to the Collateral shall not release the Grantor from any of such duties and
obligations. Neither the Administrative Agent nor any Lender shall be obligated to perform or
fulfill any of the Grantor’s duties or obligations under its Contracts or to make any payment
thereunder, or to make any inquiry as to the nature or sufficiency of any payment or property
received by it thereunder or the sufficiency of performance by any party thereunder, or to present
or file any claim, or to take any action to collect or enforce any performance, any payment of any
amounts, or any delivery of any property.

     4.17 Foreign Assets. Notwithstanding anything herein to the contrary, with respect to
any personal property of Grantor constituting Collateral which is located in or pertaining to a
jurisdiction other than the United States or any State thereof, as to which the security interest
granted hereunder may not be perfected by (a) filing financing statements under the Uniform
Commercial Code, or (b) possession or “control” (as defined in Section 8.106 or Article 9 of the
UCC) thereof in the United States, such Grantor will not be required to take any action necessary
to perfect such security interest under the laws of the jurisdiction in which such property is
located or to which such property pertains.

ARTICLE V

EVENTS OF DEFAULT AND REMEDIES

     5.1 Events of Default. The occurrence of any one or more of the following events
shall constitute an Event of Default hereunder:

          (a) Any representation or warranty made by or on behalf of the Grantor under or in connection
with this Security Agreement shall be materially false as of the date on which made.

          (b) The breach by the Grantor of any of the terms or provisions of Sections 4.1(d),
4.1(e), 4.1(f), 4.6 or 4.15.

          (c) The breach by the Grantor of any of the terms or provisions of Article IV (other
than Sections 4.1(d), 4.1(e), 4.1(f), 4.6 and 4.15) or
Article VII which is not remedied within five (5) days after the earlier of knowledge by
the Grantor of such breach or notice thereof from the Administrative Agent which notice will be
given at the request of any Lender.

          (d) The breach by the Grantor of any of the terms or provisions of this Security Agreement
(other than Article IV and Article VII) which is not remedied within thirty (30)
days after the

16

 

earlier of knowledge by the Grantor of such breach or notice thereof from the Administrative
Agent (which notice will be given at the request of any Lender).

          (e) The occurrence of any “Event of Default” under, and as defined in, the Credit Agreement.

          (f) Any Equity Interest which is included within the Collateral shall at any time constitute a
Security or the issuer of any such Equity Interest shall take any action to have such interests
treated as a Security unless (i) all certificates or other documents constituting such Security
have been delivered to the Administrative Agent and such Security is properly defined as such under
Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer
thereof or otherwise, or (ii) the Administrative Agent has entered into a control agreement with
the issuer of such Security or with a securities intermediary relating to such Security and such
Security is defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a
result of actions by the issuer thereof or otherwise.

     5.2 Remedies.

          (a) Upon the occurrence and during the continuation of an Event of Default, the Administrative
Agent may exercise any or all of the following rights and remedies:

          (i) those rights and remedies provided in this Security Agreement, the Credit
Agreement, or any other Loan Document; provided that, this Section 5.2(a) shall not
be understood to limit any rights or remedies available to the Administrative Agent and the
Lenders prior to an Event of Default;

          (ii) 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;

          (iii) give notice of sole control or any other instruction under any Deposit Account
Control Agreement or and other control agreement with any securities intermediary and take
any action therein with respect to such Collateral;

          (iv) without notice (except as specifically provided in Section 8.1 or
elsewhere herein), demand or advertisement of any kind to Grantor or any other Person, enter
the premises of the Grantor where any Collateral is located (through self-help and without
judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign,
grant an option or options to purchase or otherwise dispose of, deliver, or realize upon,
the Collateral or any part thereof in one or more parcels at public or private sale or sales
(which sales may be adjourned or continued from time to time with or without notice and may
take place at the Grantor’s premises or elsewhere), for cash, on credit or for future
delivery without assumption of any credit risk, and upon such other terms as the
Administrative Agent may deem commercially reasonable; and

          (v) concurrently with written notice to the Grantor, transfer and register in its name
or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange
certificates or instruments representing or evidencing Pledged Collateral for certificates
or instruments of smaller or larger denominations, to exercise the voting and all other
rights as a holder with respect thereto, to collect and receive all cash dividends,
interest, principal and other distributions made thereon and to otherwise act with respect
to the Pledged Collateral as though the Administrative Agent was the outright owner thereof.

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

          (c) The Administrative Agent shall have the right upon any such public sale or sales and, to
the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of
the Administrative Agent and the Lenders, the whole or any part of the Collateral so sold, free of
any right of equity redemption, which equity redemption the Grantor hereby expressly releases.

          (d) Until the Administrative Agent is able to effect a sale, lease, or other disposition of
Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any part
thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its
value or for any other purpose deemed appropriate by the Administrative Agent. The Administrative
Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of
Collateral and to enforce any of the Administrative Agent’s remedies (for the benefit of the
Administrative Agent and Lenders), with respect to such appointment without prior notice or hearing
as to such appointment.

          (e) If, after the Credit Agreement has terminated by its terms and all of the Obligations have
been paid in full, there remain Swap Obligations outstanding, the Required Secured Parties 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 pursuant to the
terms of the Swap Agreement.

          (f) Notwithstanding the foregoing, neither the Administrative Agent nor the Lenders shall be
required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against,
the Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment
of the Secured Obligations or to pursue or exhaust any of their rights or remedies with respect to
any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or
any guarantee of the Secured Obligations or to resort to the Collateral or any such guarantee in
any particular order, or (iii) effect a public sale of any Collateral.

          (g) The Grantor recognizes that the Administrative Agent may be unable to effect a public sale
of any or all the Pledged Collateral and may be compelled to resort to one or more private sales
thereof in accordance with clause (a) above. The Grantor also acknowledges that any
private sale may result in prices and other terms less favorable to the seller than if such sale
were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall
not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale
being private. The Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Collateral for the period of time necessary to permit the Grantor or the issuer of the
Pledged Collateral to register such securities for public sale under the Securities Act of 1933, as
amended, or under applicable state securities laws, even if the Grantor and the issuer would agree
to do so.

     5.3 Grantor’s Obligations Upon Default. Upon the request of the Administrative Agent
after the occurrence and during the continuation of an Event of Default, the Grantor will:

          (a) assemble and make available to the Administrative Agent the Collateral and all books and
records relating thereto at any place or places specified by the Administrative Agent, whether at
the Grantor’s premises or elsewhere;

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          (b) permit the Administrative Agent, by the Administrative Agent’s representatives and agents,
to enter, occupy and use 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 or the books and records relating thereto, or both, to remove all or any part of the
Collateral or the books and records relating thereto, or both, and to conduct sales of the
Collateral, without any obligation to pay the Grantor for such use and occupancy;

          (c) prepare and file, or cause an issuer of Pledged Collateral to prepare and file, with the
Securities and Exchange Commission or any other applicable government agency, registration
statements, a prospectus and such other documentation in connection with the Pledged Collateral as
the Administrative Agent may request, all in form and substance satisfactory to the Administrative
Agent, and furnish to the Administrative Agent, or cause an issuer of Pledged Collateral to furnish
to the Administrative Agent, any information regarding the Pledged Collateral in such detail as the
Administrative Agent may specify;

          (d) take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to
register or qualify the Pledged Collateral to enable the Administrative Agent to consummate a
public sale or other disposition of the Pledged Collateral; and

          (e) at its own expense, cause the independent certified public accountants then engaged by the
Grantor to prepare and deliver to the Administrative Agent and each Lender, at any time, and from
time to time, promptly upon the Administrative Agent’s request, the following reports with respect
to the Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) a test verification of such Accounts.

     5.4 Grant of Intellectual Property License. For the purpose of enabling the
Administrative Agent to exercise the rights and remedies under this Article V at such time
as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, the
Grantor hereby during the continuation of an Event of Default and to the extent permitted by any
applicable agreements (a) grants to the Administrative Agent, for the benefit of the Administrative
Agent and the Lenders, an irrevocable, nonexclusive license (exercisable without payment of royalty
or other compensation to the Grantor) to use, license or sublicense any Intellectual Property
Rights now owned or hereafter acquired by the Grantor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed items may be recorded or
stored and to all computer software and programs used for the compilation or printout thereof and
(b) irrevocably agrees that the Administrative Agent may sell any of the Grantor’s Inventory
directly to any person, including without limitation persons who have previously purchased the
Grantor’s Inventory from the Grantor and in connection with any such sale or other enforcement of
the Administrative Agent’s rights under this Security Agreement, may sell Inventory which bears any
Trademark owned by or licensed to the Grantor and any Inventory that is covered by any Copyright
owned by or licensed to the Grantor and the Administrative Agent may finish any work in process and
affix any Trademark owned by or licensed to the Grantor and sell such Inventory as provided herein.

ARTICLE VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

     6.1 Account Verification. The Administrative Agent may at any time, in the
Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or in the
name of the Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account
Debtors of such Grantor, parties to contracts with the Grantor and obligors in respect of
Instruments of the Grantor to verify with

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such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and
any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or
other Receivables.

     6.2 Authorization for Secured Party to Take Certain Action.

          (a) The Grantor irrevocably authorizes the Administrative Agent at any time and from time to
time in the sole discretion of the Administrative Agent and appoints the Administrative Agent as
its attorney in fact (i) to execute on behalf of the Grantor as debtor and to file financing
statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to
maintain the perfection and priority of the Administrative Agent’s security interest in the
Collateral, (ii) to endorse 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 Administrative Agent in its sole discretion deems necessary or desirable to perfect
and to maintain the perfection and priority of the Administrative Agent’s security interest in the
Collateral, (iv) to contact and enter into one or more agreements with the issuers of
uncertificated securities which are Pledged Collateral or with securities intermediaries holding
Pledged Collateral as may be necessary or advisable to give the Administrative Agent Control over
such Pledged Collateral, (v) during the continuance of an Event of Default, to apply the proceeds
of any Collateral received by the Administrative Agent to the Secured Obligations as provided in
Section 7.3, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the
Collateral (except for such Liens as are specifically permitted hereunder), (vii) to contact
Account Debtors for any reason and Administrative Agent will use commercially reasonable efforts to
notify the Grantor of such contact within a reasonable time period after such contact;
provided, that, the failure to so notify Grantor will not impose any liability upon
the Administrative Agent or the Lenders, (viii) during the continuance of an Event of Default, to
demand payment or enforce payment of the Receivables in the name of the Administrative Agent or the
Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money
relating to the Receivables, (ix) during the continuance of an Event of Default, to sign the
Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any
Account Debtor of the Grantor, assignments and verifications of Receivables, (x) during the
continuance of an Event of Default, to exercise all of the Grantor’s rights and remedies with
respect to the collection of the Receivables and any other Collateral, (xi) during the continuance
of an Event of Default, to settle, adjust, compromise, extend or renew the Receivables, (xii)
during the continuance of an Event of Default, to settle, adjust or compromise any legal
proceedings brought to collect Receivables, (xiii) during the continuance of an Event of Default,
to prepare, file and sign the Grantor’s name on a proof of claim in bankruptcy or similar document
against any Account Debtor of the Grantor, (xiv) during the continuance of an Event of Default, to
prepare, file and sign the Grantor’s name on any notice of Lien, assignment or satisfaction of Lien
or similar document in connection with the Receivables, (xv) during the continuance of an Event of
Default, to change the address for delivery of mail addressed to the Grantor to such address as the
Administrative Agent may designate and to receive, open and dispose of all mail addressed to the
Grantor, and (xvi) during the continuance of an Event of Default, to do all other acts and things
necessary to carry out this Security Agreement; and the Grantor agrees to reimburse the
Administrative Agent on demand for any payment made or any expense incurred by the Administrative
Agent in connection with any of the foregoing; provided that, this authorization shall not relieve
the Grantor of any of its obligations under this Security Agreement or under the Credit Agreement.

          (b) All acts of said attorney or designee in accordance with the foregoing are hereby ratified
and approved. The powers conferred on the Administrative Agent, for the benefit of the
Administrative Agent and Lenders, under this Section 6.2 are solely to protect the
Administrative Agent’s interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers.

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     6.3 Proxy. THE GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE
AGENT AS THE PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) OF THE GRANTOR WITH
RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL
POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE
APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO
EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED
COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS,
CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE
EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY
SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE
ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING
THE CONTINUATION OF AN EVENT OF DEFAULT.

     6.4 Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE AGENT AS PROXY
AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL
THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.14.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE AGENT, NOR ANY LENDER, NOR ANY OF THEIR
RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY
DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND
SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF
DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE
FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE VII

COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS

     7.1 Collection of Receivables.

          (a) On or before the Closing Date, the Grantor shall execute and deliver to the Administrative
Agent Deposit Account Control Agreements for each Deposit Account maintained by the Grantor with a
depository other than the Administrative Agent if required by the Administrative Agent. All cash,
checks or other similar payments relating to or constituting payments made in respect of
Receivables will be deposited into such Deposit Account or any Deposit Account maintained with the
Administrative Agent (collectively, the “Collateral Deposit Accounts”), which Collateral
Deposit Accounts are identified as such on Exhibit B. On or before the Closing Date, the
Grantor shall also establish lock box service (the “Lock Boxes”) with the bank(s) set forth
in Exhibit B, which lock boxes shall be subject to irrevocable lockbox agreements in the
form provided by or otherwise acceptable to the Administrative Agent and shall be accompanied by an
acknowledgment by the bank where the Lock Box is located of the Lien of the Administrative Agent
granted hereunder and of irrevocable instructions to wire all amounts collected therein to the
Collection Account (a “Lock Box Agreement”). After the Closing Date, the Grantor will
comply with the terms of Section 7.2.

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          (b) The Grantor shall direct all of its Account Debtors to forward payments directly to Lock
Boxes subject to Lock Box Agreements. The Administrative Agent shall have sole access to the Lock
Boxes at all times and the Grantor shall take all actions necessary to grant the Administrative
Agent such sole access. At no time shall the Grantor remove any item from the Lock Box or from a
Collateral Deposit Account without the Administrative Agent’s prior written consent. If
notwithstanding the foregoing instructions, the Grantor receives any proceeds of any Receivables,
the Grantor shall receive such payments as the Administrative Agent’s trustee, and shall
immediately deposit all cash, checks or other similar payments related to or constituting payments
made in respect of Receivables received by it to a Collateral Deposit Account. All funds deposited
into any Lock Box subject to a Lock Box Agreement or a Collateral Deposit Account will be swept on
a daily basis into a collection account maintained by the Grantor with the Administrative Agent
(the “Collection Account”). The Administrative Agent shall hold and apply funds received
into the Collection Account as provided by the terms of Section 7.3.

     7.2 Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or replacing
any Collateral Deposit Account, other Deposit Account, or establishing a new Lock Box, the Grantor
shall (a) notify the Administrative Agent with respect to the opening of such Deposit Account or
Lock Box, and (b) (i) with respect to a Deposit Account, comply with Section 4.14 hereof,
or (ii) with respect to a Lock Box, cause each applicable bank or financial institution to enter
into a Lock Box Agreement with the Administrative Agent in order to give the Administrative Agent
Control of the Lock Box. In the case of Deposit Accounts or Lock Boxes maintained with Lenders,
the terms of such letter shall be subject to the provisions of the Credit Agreement regarding
setoffs.

     7.3 Application of Proceeds; Deficiency. All amounts deposited in the Collection
Account shall be deemed received by the Administrative Agent in accordance with Section 2.18 of the
Credit Agreement and shall, after having been credited in immediately available funds to the
Collection Account, be applied (and allocated) by Administrative Agent in accordance with Section
2.10(b) of the Credit Agreement; provided that, so long as no Event of Default has occurred and is
continuing, and Average 30-Day Availability is in excess of $10,000,000, collections which are
received into the Collection Account shall be deposited into the Borrower’s Funding Account rather
than being used to reduce amounts owing under the Credit Agreement. So long as full cash dominion
is in effect, the Administrative Agent shall require all other cash proceeds of the Collateral,
which are not required to be applied to the Obligations pursuant to Section 2.11 of the Credit
Agreement, to be deposited in a special non-interest bearing cash collateral account with the
Administrative Agent and held there as security for the Secured Obligations and disbursed in
accordance with the Credit Agreement. The Grantor shall have no control whatsoever over said cash
collateral account. The balance, if any, after all of the Secured Obligations have been satisfied,
shall be deposited by the Administrative Agent into the Grantor’s general operating account with
the Administrative Agent. The Grantor shall remain liable for any deficiency if the proceeds of any
sale or disposition of the Collateral are insufficient to pay all Secured Obligations, including
any attorneys’ fees and other expenses incurred by Administrative Agent or any Lender to collect
such deficiency.

ARTICLE VIII

GENERAL PROVISIONS

     8.1 Waivers. The 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 Grantor, addressed as set forth in
Article IX, at least ten 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. To the maximum extent
permitted by applicable law, the Grantor waives all claims, damages, and

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demands against the Administrative Agent or any Lender arising out of the repossession,
retention or sale of the Collateral, except such as arise solely out of the gross negligence or
willful misconduct of the Administrative Agent or such Lender as finally determined by a court of
competent jurisdiction. To the extent it may lawfully do so, the Grantor absolutely and irrevocably
waives and relinquishes the benefit and advantage of, and covenants not to assert against the
Administrative Agent or any Lender, any valuation, stay, appraisal, extension, moratorium,
redemption or similar laws and any and all rights or defenses it may have as a surety now or
hereafter existing which, but for this provision, might be applicable to the sale of any Collateral
made under the judgment, order or decree of any court, or privately under the power of sale
conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided
herein, the Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Security Agreement or any
Collateral.

     8.2 Limitation on Administrative Agent’s and Lenders’ Duty with Respect to the
Collateral. The Administrative Agent shall have no obligation to clean-up or otherwise prepare
the Collateral for sale. The Administrative Agent and each Lender shall use reasonable care with
respect to the Collateral in its possession or under its control. Neither the Administrative Agent
nor any Lender shall have any other duty as to any Collateral in its possession or control or in
the possession or control of any agent or nominee of the Administrative Agent or such Lender, or
any income thereon or as to the preservation of rights against prior parties or any other rights
pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to
exercise remedies in a commercially reasonable manner, the Grantor acknowledges and agrees that it
is commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed
significant by the Administrative Agent to prepare Collateral for disposition or otherwise to
transform raw material or work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to
fail to exercise collection remedies against Account Debtors or other Persons obligated on
Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise
collection remedies against Account Debtors and other Persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same
business as the Grantor, for expressions of interest in acquiring all or any portion of such
Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of
Collateral by utilizing internet sites that provide for the auction of assets of the types included
in the Collateral or that have the reasonable capacity of doing so, or that match buyers and
sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to
disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase
insurance or credit enhancements to insure the Administrative Agent against risks of loss,
collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed
return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate
by the Administrative Agent, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist the Administrative Agent in the collection or
disposition of any of the Collateral. The Grantor acknowledges that the purpose of this
Section 8.2 is to provide non-exhaustive indications of what actions or omissions by the
Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of
remedies against the Collateral and that other actions or omissions by the Administrative Agent
shall not be deemed commercially unreasonable solely on account of not being indicated in this
Section 8.2. Without limitation upon the foregoing, nothing contained in this Section
8.2 shall be construed to grant any rights to the Grantor or to impose any duties on the
Administrative Agent that would not have been granted or imposed by this Security Agreement or by
applicable law in the absence of this Section 8.2.

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     8.3 Compromises and Collection of Collateral. The Grantor and the Administrative
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, the Grantor agrees that the Administrative
Agent may at any time and from time to time, if an Event of Default has occurred and is continuing,
compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount
as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and
any such action by the Administrative Agent shall be commercially reasonable so long as the
Administrative Agent acts in good faith based on information known to it at the time it takes any
such action.

     8.4 Secured Party Performance of Debtor Obligations. Without having any obligation to
do so, during the continuance of an Event of Default, the Administrative Agent may perform or pay
any obligation which the Grantor has agreed to perform or pay in this Security Agreement and the
Grantor shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent
pursuant to this Section 8.4. The Grantor’s obligation to reimburse the Administrative
Agent pursuant to the preceding sentence shall be a Secured Obligation payable on demand.

     8.5 Specific Performance of Certain Covenants. The Grantor acknowledges and agrees
that a breach of any of the covenants contained in Sections 4.1(d), 4.1(e),
4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10,
4.12, 4.13, 4.14, 4.15, 4.16, 5.3, or 8.7
or in Article VII will cause irreparable injury to the Administrative Agent and the
Lenders, that the Administrative Agent and Lenders have no adequate remedy at law in respect of
such breaches and therefore agrees, without limiting the right of the Administrative Agent or the
Lenders to seek and obtain specific performance of other obligations of the Grantor contained in
this Security Agreement, that the covenants of the Grantor contained in the Sections referred to in
this Section 8.5 shall be specifically enforceable against the Grantor.

     8.6 Dispositions Not Authorized. The Grantor is not authorized to sell or otherwise
dispose of the Collateral except as set forth in Section 4.1(d) and notwithstanding any
course of dealing between the Grantor and the Administrative Agent or other conduct of the
Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as
set forth in Section 4.1(d)) shall be binding upon the Administrative Agent or the Lenders
unless such authorization is in writing signed by the Administrative Agent with the consent or at
the direction of the Required Secured Parties.

     8.7 No Waiver; Amendments; Cumulative Remedies. No delay or omission of the
Administrative Agent or any Lender 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 Administrative Agent with the
concurrence or at the direction of the Lenders required under Section 9.02 of the Credit Agreement
and then only to the extent in such writing specifically set forth. All rights and remedies
contained in this Security Agreement or by law afforded shall be cumulative and all shall be
available to the Administrative Agent and the Lenders until the Secured Obligations have been paid
in full.

     8.8 Limitation by Law; Severability of Provisions. All rights, remedies and powers
provided in this Security Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this Security Agreement
are intended to be subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the

24

 

extent necessary so that they shall not render this Security Agreement invalid, unenforceable
or not entitled to be recorded or registered, in whole or in part. Any provision in any 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.

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

     8.10 Benefit of Agreement. The terms and provisions of this Security Agreement shall
be binding upon and inure to the benefit of the Grantor, the Administrative Agent and the Lenders
and their respective successors and assigns (including all persons who become bound as a debtor to
this Security Agreement), except that the Grantor shall not have the right to assign its rights or
delegate its obligations under this Security Agreement or any interest herein, without the prior
written consent of the Administrative Agent. No sales of participations, assignments, transfers,
or other dispositions of any agreement governing the Secured Obligations or any portion thereof or
interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the
benefit of the Administrative Agent and the Lenders, hereunder.

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

     8.12 Taxes and Expenses. Any taxes (including income taxes) payable or ruled payable
by Federal or State authority in respect of this Security Agreement shall be paid by the Grantor,
together with interest and penalties, if any. The Grantor shall reimburse the Administrative Agent
for any and all out-of-pocket expenses and internal charges (including reasonable attorneys’,
auditors’ and accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and
accountants who may be employees of the Administrative Agent) paid or incurred by the
Administrative 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 Grantor in the performance of actions required pursuant to the terms hereof shall be borne
solely by the Grantor.

     8.13 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.

     8.14 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) the
Credit Agreement has terminated pursuant to its express terms and (ii) all of the Secured
Obligations have been indefeasibly

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paid and performed in full (or with respect to any outstanding Letters of Credit, a cash
deposit or Supporting Letter of Credit has been delivered to the Administrative Agent as required
by the Credit Agreement) and no commitments of the Administrative Agent or the Lenders which would
give rise to any Secured Obligations are outstanding.

     8.15 Entire Agreement. This Security Agreement embodies the entire agreement and
understanding between the Grantor and the Administrative Agent relating to the Collateral and
supersedes all prior agreements and understandings between the Grantor and the Administrative Agent
relating to the Collateral.

     8.16 CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF TEXAS, BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     8.17 CONSENT TO JURISDICTION. THE GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR TEXAS STATE COURT SITTING IN TEXAS IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
THE GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR
THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE GRANTOR IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE GRANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN TEXAS.

     8.18 WAIVER OF JURY TRIAL. THE GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.

     8.19 Indemnity. The Grantor hereby agrees to indemnify the Administrative Agent and
the Lenders, and their respective successors, assigns, agents and employees, 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 Administrative Agent or any Lender is a party thereto) imposed on, incurred by or asserted
against the Administrative Agent or the Lenders, or their respective successors, assigns, agents
and employees, in any way relating to or arising out of this Security Agreement, 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 Administrative Agent or
the Lenders or the Grantor, and any claim for Patent, Trademark or Copyright infringement) provided
that such indemnity shall not be available to the extent such liabilities, damages, penalties,
suits, costs and

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expenses resulted from the gross negligence or willful misconduct of the Administrative Agent
or the Lenders.

     8.20 Counterparts. This Security Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and any of the parties
hereto may execute this Security Agreement by signing any such counterpart.

ARTICLE IX

NOTICES

     9.1 Sending Notices. Any notice required or permitted to be given under this Security
Agreement shall be sent by United States mail, telecopier, personal delivery or nationally
established overnight courier service, and shall be deemed received (a) when received, if sent by
hand or overnight courier service, or mailed by certified or registered mail notices or (b) when
sent, if sent by telecopier (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the next Business Day
for the recipient), in each case addressed to the Grantor at the address set forth on Exhibit
A as its principal place of business, and to the Administrative Agent and the Lenders at the
addresses set forth in accordance with Section 9.01 of the Credit Agreement.

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

     9.3 Intercreditor Agreement Governs. Notwithstanding any other provision contained
herein, this Agreement, the Liens created hereby and the rights, remedies, duties and obligations
provided for herein are subject in all respects to the provisions of the Intercreditor Agreement,
In the event of any conflict or inconsistency between the provisions of this Agreement and the
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall govern and control for
all purposes.

ARTICLE X

THE ADMINISTRATIVE AGENT

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

[Signature Page Follows]

27

 

     IN WITNESS WHEREOF, the Grantor and the Administrative Agent have executed this Security
Agreement as of the date first above written.

	 	 	 	 	 
	 	GRANTOR:

SUPERIOR OFFSHORE INTERNATIONAL, L.L.C.

 	 
	 	By:  	/s/ Roger D. Burks
 	 
	 	Name:   Roger D. Burks 	
     
	 	Title:   Chief Financial Officer 	 
	 

Pledge and Security Agreement (Superior Offshore)

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 	 
	 	By:  	/s/ Christy West
 	 
	 	Name:  Christy West 	 
	 	Title:   Vice President 	 
	 

Pledge and Security Agreement (Superior Offshore)

 

 

STATE OF TEXAS)

     ) SS

COUNTY OF HARRIS)

     The foregoing instrument was acknowledged before me this ___day of February 27, 2007, by
Roger D. Burks, the Chief Financial Officer of Superior Offshore International, L.L.C., a Louisiana
limited liability company, on behalf of said limited liability company.

	 	 	 	 	 
	 

	 	/s/ Brandi M. Martin
	 	 
	 

	 	 	 	 
	 

	 	Notary Public	 	 
	 
	 

	 	My commission expires: 3/21/07	 	 

Pledge and Security Agreement (Superior Offshore)

 

 

EXHIBIT H

(See Section 3.1 of Security Agreement)

OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

Louisiana – Orleans Parishexv10w28

 

Exhibit 10.28

			
	 	 	 
	
	 	MSP AGREEMENT

CA, INC.

MANAGED SERVICES PROVIDER (MSP) AGREEMENT

	 	 	 	 	 
	Name and Address of Authorized MSP:	 	InterNetwork Experts, Inc.
	 	 	1955 Lakeway Drive, Suite 220, Lewisville, TX 75057
	Contact: Jon Groves
	 	 	 	 
	Tel: 469-549-3903

	 	 	 	E-Mail: Jonathon.Groves@netwurant.com

This MSP Agreement (“Agreement”) is entered into by CA, Inc. whose principal place of business is
at One CA Plaza, Islandia, New York 11949 (“CA”) and the MSP identified above, and will commence on
the Effective Date.

CA and MSP agree to the terms and conditions of this Standard MSP Agreement (“Agreement”).
This Agreement authorizes MSP to provide managed services to their End Users as further defined
herein.

	 	3.	 	DEFINITIONS. In this Agreement each word or phrase with the initial letter
capitalized shall have the following meaning unless expressly provided otherwise. The term
“Section” refers to an identified section of this Agreement. A reference to an Exhibit is to
an Exhibit to this Agreement as the same may be modified by mutual agreement in writing from
time to time.

	 	3.1.	 	CA Marks means CA’s trade marks, service marks, logos, designations and
insignias.
	 
	 	1.1.	 	CA Software means CA software products stated in Exhibit A the use of which is
restricted solely to enable MSP to provide remote monitoring services to MSP End Users
using a virtual computer connection to MSP End Users’ networks provide any of the following
services: to monitor and provide asset management, software delivery, desktop refresh,
remote control and/or help desk services. Such CA Software shall also include all
corrections, Maintenance Releases, New Versions and associated Documentation thereto
provided by CA to MSP, but not beta, pre-release or other special release products, which
are specifically excluded from the definition of CA Software.
	 
	 	3.2.	 	Confidential Information means the information and materials noticed or marked
by CA or MSP as confidential and proprietary. “Confidential Information” does not include
information that (i) is already known to the receiving party at the time it is disclosed
and has not been obtained wrongfully, (ii) becomes publicly known without fault of the
receiving party, (iii) is independently developed by the receiving party, (iv) is approved
for release in writing by the disclosing party, (v) is disclosed without restriction by the
disclosing party to a third party, or (vi) is disclosed pursuant to legal obligations
beyond the control of the disclosing and receiving parties. However, the foregoing shall
not be deemed to grant to either party a license of the other party’s copyrights or
patents. For purposes of this definition, CA Software shall always be deemed Confidential
Information.
	 
	 	3.3.	 	Demonstration Software means the CA Software used internally by MSP on the
computer(s) listed in the applicable Demonstration Software Order Form(s) for demonstration
and support purposes.
	 
	 	3.4.	 	Documentation means CA’s published technical manuals that accompany the CA
Software.
	 
	 	3.5.	 	End Users means the remote managed service third party entities for which MSP
provides or shall provide remote managed services and with whom MSP has a confidentiality
agreement sufficiently broad in scope to include the CA Software as defined below. MSP End
Users shall not include an entity that redistributes, distributes, licenses, rents or
leases CA Software to other parties in the regular course of business.
	 
	 	1.2.	 	End User Agreement means the terms and conditions pursuant to which an End User
has access to CA Software by MSP for MSP services including access to the functionality of
the CA Software. Such Agreement shall include terms and conditions that will cause End User
to observe usage and confidentiality restrictions set forth herein prior to allowing End
User to have such access solely for End User’s Internal Use.
	 
	 	1.3.	 	Effective Date means the date stated in Exhibit A.

			
	 	 	 
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	 	3.6.	 	Internal Use means use for an End User’s internal business operations only.
“Internal Use” does not include timesharing, provision of outsourcing or facilities
management services.
	 
	 	3.7.	 	Maintenance Releases means temporary fixes, error corrections, workarounds and
corrections made available by CA for MSP to support the usage of CA Software, but does not
include (i) New Versions or (ii) new products available from CA for an additional fee.
	 
	 	1.4.	 	New Versions means a new version of the CA Software containing new features or
functions as well as error corrections, but does not include new products available from CA
for an additional fee.
	 
	 	3.8.	 	Territory means the area identified in Exhibit A but always excluding any
countries which CA is prohibited from exporting its products to as prescribed by US export
laws.
	 
	 	3.9.	 	Upgrade means any change in the usage of the CA Products (including, but not
limited to the transfer of CA Products to a computer in a higher price classification, or
an increase in authorized use limitation) that would result in an increase in price as
determined in accordance with CA’s then current price list.

	 	2.	 	TERM. This Agreement, unless terminated earlier as provided in this Agreement, will
commence on the Effective Date and will expire three (3) years from the Effective Date,
subject to the term limitations specified in Exhibit A. Nothing contained in this Agreement
should be interpreted as requiring either CA or MSP to renew or extend this Agreement.
	 
	 	4.	 	APPOINTMENT.

	 	4.1.	 	Appointment. CA appoints MSP within the Territory. This appointment is
non-exclusive, with CA reserving the right to appoint other MSPs without restriction as to
number and location. Subject to Section 3.2 below, CA grants a non-exclusive,
non-transferable, license within the Territory to:

	 	2.1.1.	 	utilize the CA Software in the designated Operations Center (“OC”), located at the
Installation Site(s) indicated on Exhibit A, to provide remote monitoring services to
MSP End Users and to process the business data of multiple MSP End Users. If MSP
subsequently opens other OCs within the Territory, MSP agrees to obtain CA’s prior
written approval to use the CA Software at such other OC locations and MSP further
agrees to comply with any reasonable conditions imposed on MSP by CA in consideration
for granting such approval. In no circumstance may MSP or any MSP End User use or
access any CA Software hereunder for the benefit of any MSP End User which is itself
engaged in the business of providing data processing services of any kind to its own
customers, whether acting as a facilities manager, remote services provider, service
bureau, outsourcer or otherwise.
	 
	 	2.1.2.	 	replace the CA Software with New Versions made generally available by CA from time to
time if MSP pays the applicable maintenance and support fees; and
	 
	 	4.1.1.	 	acquire Upgrades intended for End Users from CA, on an as-needed basis if MSP shall
have paid the applicable maintenance and support fees.
	 
	 	4.1.2.	 	provide demonstration of the MSP service to End Users or prospective end users that
includes CA Software subject to the confidentiality and usage restrictions contained
herein.

	 	4.2.	 	Restrictions. The license made available to MSP is subject to the following:

	 	4.2.1.	 	MSP shall not reverse engineer, disassemble, decompile, or otherwise attempt to
discover the source code for the CA Software; redistribute, encumber, sell, rent,
lease, sublicense, or otherwise transfer rights to the CA Software (except as expressly
permitted hereunder); or remove or alter any trademark, logo, copyright or other
proprietary notices, legends, symbols or labels in the CA Software (except as
explicitly permitted hereunder). MSP shall not disclose the individual or separate
pricing of the CA Software under this Agreement to any third party.

	 	2.2.	 	Subsidiaries and Affiliates. MSP’s subsidiaries and affiliates are not
permitted to access the CA Software without the prior written consent of CA.

	3.	 	PRODUCTS AND PRICING

			
	 	 	 
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	 	MSP Initial      /s/ JG     
	 	 	 
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	 	4.3.	 	Eligible Products. MSP is authorized under this Agreement to utilize and market
the functionality of the CA Software as part of the remote managed services provided by
MSP.
	 
	 	3.1.	 	Pricing. The fees payable by MSP will be in accordance with the Fees in
Exhibit A.
	 
	 	4.4.	 	CA Software Changes. CA reserves the right at any time to make changes or
modifications to any CA Software, including without limitation changes which are required
(i) for security, or (ii) to facilitate performance in accordance with published
documentation. CA also reserves the right at any time to (i) increase or decrease list or
recommended prices against which discounts are calculated and (ii) to discontinue the sale
or availability of any CA Software at any time. CA will give 30 days notice of any list
price increases or discontinuance of any CA Software. All such changes shall become
effective 30 days after notice is given. Orders requesting delivery after the effective ate
of a price change will be invoiced at the changed price.

	 	5.	 	MARKETING, END USER SATISFACTION, MSP OBLIGATIONS AND SUPPORT.

	 	5.1.	 	Use of Authorized MSP Title. MSP may refer to itself, in connection with
exercising its rights under this Agreement, as a “CA Authorized MSP,” but solely in
connection with marketing the CA Software and only during the term of this Agreement.
	 
	 	3.2.	 	Use of CA Marks and Trade Names. MSP is authorized to use the CA Marks
applicable to CA Software obtained under this Agreement in connection with its marketing of
CA Software as part of the managed services provided by MSP, but only in accordance with
CA’s then current trademark usage policies (including rights to monitor MSP’s use of the CA
Marks) set forth on CA’s web site www.ca.com/corp_identity/legal.htm and only during the
term of this Agreement. Upon the Expiration Date or termination of this Agreement, MSP
agrees to cease all display, advertising and use of any and all CA Marks and trade names.
MSP recognizes CA’s or its licensors’ ownership and title to the trade names and CA Marks
and the goodwill attaching to the trade names and CA Marks. MSP agrees that any goodwill
that accrues because of its use of the trade names and/or CA Marks belongs to CA. MSP
agrees that if it contests the CA Marks or trade names, or makes application for
registration of any CA Marks or trade names without CA’s prior written consent, CA shall be
entitled to terminate this Agreement immediately upon written notice to MSP. MSP agrees
not to use, employ or attempt to register any trademarks or trade names that are
confusingly similar to the CA Marks or trade names.
	 
	 	3.3.	 	Obligations using CA Marks. MSP shall not attach, remove or disfigure any CA
Marks on the CA Software and shall not attach any additional marks to the CA Software
except as otherwise agreed by CA. MSP shall not attach the CA Marks to any products other
than the CA Software. MSP agrees not to alter or remove or obscure any copyright or other
proprietary notices on or in the CA Software or related Documentation or materials. CA may
from time to time use other or additional marks with respect to any CA Software. The
provisions of this Agreement governing MSP’s use of the CA Marks shall also apply to such
other marks.
	 
	 	3.4.	 	End User Satisfaction. MSP agrees that high End User satisfaction is a
condition of its continued authorization by CA. Although CA has granted MSP a
Territory-wide authority to remotely manage End Users with CA Software under the terms of
this Agreement, MSP agrees that it will not market and distribute CA Software in areas
where it does not have the ability to support the CA Software. In addition, to help ensure
high End User satisfaction, MSP agrees to:

	 	5.1.1.	 	report to CA promptly and in writing all suspected and actual problems with any CA
Software;
	 
	 	5.1.2.	 	avoid deceptive, misleading or unethical practices that are or might be detrimental
to CA or the CA Software;
	 
	 	5.1.3.	 	refrain from making any false or misleading representations with regard to CA or CA
Software;
	 
	 	5.1.4.	 	refrain from making any representations, warranties or guarantees to customers with
respect to the specifications, features or capabilities of CA Software that are
inconsistent with the literature distributed by CA; and
	 
	 	5.1.5.	 	provide or cause to be provided all original media and manuals accompanying each CA
Software license to the End User if applicable.

	 	5.2.	 	MSP Obligations. MSP agrees to the following:

			
	 	 	 
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	 	MSP AGREEMENT

	 	5.2.1.	 	MSP shall bear all costs of integrating and or implementation, including any required
education services relating to the CA Software using CA Services pursuant to the MSP
Support Addendum attached as Exhibit B.
	 
	 	5.2.2.	 	MSP shall bear all costs of and all related sales and marketing expenses.

	 	5.3.	 	Support and Maintenance.

	 	3.4.1.	 	MSP First Level Support. MSP shall provide first level support for the CA
Software as described in the MSP Support Addendum attached hereto, substantially
similar to the level of support provided by CA to an End User,. MSP shall ensure that
members of its technical staff complete sufficient training regarding the CA Software
as necessary to provide first level support to MSP’s End Users and MSP Channel
Partners. CA shall not have any obligation to provide first level support to MSP’s End
Users (unless CA has entered into a maintenance agreement directly with the End User).
If CA directly supports an End User, CA shall be entitled to retain the full amount of
maintenance revenue received from such End User.
	 
	 	3.4.2.	 	Second Level Support and Maintenance. CA shall provide MSP with second level
support (as detailed at the following web site: http://supportconnect.ca.com as updated
from time to time) and “Maintenance” as described below for CA Software properly
licensed to MSP’s End Users in return for payment by MSP of the maintenance fees set
forth in Exhibit A (or purchase of any CA Software that includes annual Maintenance)
and provided that MSP follows CA’s standard procedures for provision of support. MSP’s
payment of the fee each year shall entitle MSP to the following “Maintenance” benefits:
(i) the provision of second level telephone support and assistance from CA respecting
the use and operation of the CA Software as well as error fixes and (ii) the provision
of New Versions and enhancements of the CA Software running on new operating systems
provided the same are developed and released by CA generally and delivered at no extra
charge to CA’s other licensees who have active maintenance plans. MSP is not entitled
to second level support from CA or provision of other Maintenance benefits for End
Users not under an annual maintenance plan.
	 
	 	3.4.3.	 	Exceptions for Support. CA shall have no obligation to provide second level
support to MSP for: (i) altered, damaged or modified CA Software; (ii) CA Software that
is not the then-current release of the CA Software available from CA; (iii) CA Software
problems caused by MSP, or the End User’s negligence, hardware malfunction or other
causes beyond the control of CA; (iv) CA Software installed on a hardware or operating
system environment which is not supported by CA; or (v) pre-release or beta CA Software
that are not part of an official CA beta program.
	 
	 	3.4.4.	 	Demonstration Software. MSP may obtain Demonstration Software from CA. MSP
must complete CA’s then standard Demonstration Software order form and deliver such
order form to CA for each copy of the Demonstration Software acquired by MSP under this
Agreement. Demonstration Software may not be used by MSP for production purposes or
transferred or sublicensed to any third party. Such licenses may only be used for
demonstration and support purposes if MSP pays the applicable second level support fees
and shall be subject to all of the terms, conditions and restrictions of this
Agreement. Such licenses shall be returned to CA in the event of any expiration or
termination of this Agreement.

	 	6.	 	ROYALTY REPORTING AND PAYMENT

	 	3.5.	 	On or before ten (10) days after the last business day of each calendar quarter from
the Effective Date, MSP agrees to provide CA with a written report identifying the total
number of handsets as identified in Exhibit A. The report shall be in the format CA shall
reasonably require from time to time.
	 
	 	3.6.	 	All amounts payable under this Agreement shall be paid in the currency stated in the
Exhibit A without deduction or set off and if no currency is stated in Exhibit A then in US
Dollars and all amounts are exclusive of all taxes, including sales, use or value added
taxes where applicable. Upon presentation of invoices by CA, MSP shall pay any and all
applicable tariffs, duties or taxes (other than franchise and income taxes for which CA is
responsible) imposed or levied by any government or agency, including, without limitation,
federal, state and local sales, use, value added and personal property taxes. Any claimed
exemption from such tariffs, duties or taxes must be supported by a tax exemption
certificate and other proper documentary evidence delivered to CA at the time of signature
of this Agreement.
	 
	 	3.7.	 	During the term of this Agreement and for a period of at least three (3) years
following termination or expiry of this Agreement, MSP shall keep full, true and accurate
records and accounts in accordance with generally
accepted accounting practices to show the amount of fees payable to CA under this
Agreement. CA shall have

			
	 	 	 
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	 	MSP AGREEMENT

	 	 	 	the right to inspect MSP’s business premises to determine MSP’s
compliance with this Agreement and to audit MSP’S books and records related to this
Agreement to determine that fees paid to CA are correct. All costs of audit or inspection
shall be borne by CA except that such expenses shall be borne by MSP in the event that any
inspection or audit determines that MSP has underpaid fees in any period in excess of five
percent (5%). MSP shall be required to pay to CA any underpaid fees and late charges
thereon shown by an inspection or audit. Such audit right shall survive the termination of
this Agreement for a period of three (3) years.

	 	3.8.	 	In the event any payment is not made when due, CA may also: (i) cease provision of
technical support and (ii) pursue all other available legal remedies. Any such actions by
CA shall not give rise to any claim by MSP for breach of this Agreement. In addition to
such other rights as CA may have, MSP shall pay an annual late payment charge equal to the
lesser of one and one-half percent (1.5%) of the outstanding amount or the maximum amount
allowed by law on any invoice rendered by CA that is not paid when due.
	 
	 	3.9.	 	Any dispute MSP may have concerning any invoice issued by CA to MSP must be submitted
to CA within thirty (30) days from the date of receipt of the invoice. If MSP fails to do
so, MSP shall have no further right to dispute the relevant invoice.

	 	7.	 	INTELLECTUAL PROPERTY RIGHTS, INDEMNIFICATION AND CONFIDENTIAL INFORMATION.

	 	7.1.	 	Proprietary Nature of Products and Ownership. No title to or ownership of the
CA Software is transferred to MSP. Notwithstanding any provision of this Agreement to the
contrary, CA owns and retains all title and ownership of all intellectual property rights
in the CA Software, including all software, software master diskettes, copies of software,
master diskettes, documentation and related materials that are acquired, produced or
shipped by CA under this Agreement, and all modifications to and derivative works from
software acquired under this Agreement made by MSP, CA or any third party. CA does not
transfer any portion of such title and ownership, or any of the associated goodwill, to
MSP, and this Agreement should not be construed to grant MSP any right or license, whether
by implication, estoppel or otherwise, except as expressly provided. MSP agrees to be
bound by and observe the proprietary nature of the CA Software. MSP agrees to take
appropriate action by instruction or agreement with its employees, agents, contractors and
sub-licensees who are permitted access to the CA Software to fulfill MSP’s obligations
under this Agreement. Except as set forth in this Agreement, or as may be permitted in
writing by CA, MSP agrees not to provide CA Software or any part or copies thereof to any
third party without the prior written consent of CA.
	 
	 	3.10.	 	Indemnification. Except as limited in Sections 7.3, 7.4 and 7.5 below, and
provided MSP is not then in default under this Agreement, CA shall indemnify MSP and keep
MSP indemnified from and against any and all reasonable losses and damages, costs
(including reasonable legal fees), charges, claims and expenses arising from or by reason
of any third party claim that the MSP’s use or possession of the CA Software provided by
CA to MSP in accordance with the provisions of this Agreement infringes a third party’s
copyright and/or patent. CA shall not indemnify any End User of MSP.
	 
	 	3.11.	 	In the event that a claim is made or threatened against MSP to which the indemnity in
Section 7.2 applies, then MSP shall:

	 	7.1.1.	 	upon becoming aware of any infringement or allegations of infringement promptly
notify CA of the same in writing;
	 
	 	7.1.2.	 	not make any admissions as to liability or compromise or agree to any settlement
without CA’s prior written consent; and
	 
	 	7.1.3.	 	provide CA with full control of the defense and settlement negotiations and provide
all reasonable assistance at CA’s expense in connection with any negotiations and
litigation arising from such claims.

	 	3.12.	 	If a claim or alleged claim of infringement of any copyright and/or patent in the CA
Software is made and such claim causes MSPs use of the CA Software (or any part thereof) to
be disrupted, or materially impaired, or impairs MSP’s ability to provide managed remote
services to End Users, then CA may at its own option and expense:

	 	7.4.1.	 	Procure the right for MSP to continue to use and distribute the infringing CA
Software in the manner provided in this Agreement; or

			
	 	 	 
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	 	MSP AGREEMENT

	 	3.12.1.	 	modify or replace the infringing or potentially infringing CA Software (or the
relevant part thereof) so that there is no infringement or potential infringement and
CA shall ensure that such modification or replacement provides the same, or
substantially the same or improved functionality to the software being replaced and is
effected by CA with minimal interruption to the business of MSP; or
	 
	 	3.12.2.	 	if none of the foregoing alternatives is reasonably practicable, to terminate the
relevant license and remove the infringing CA Software from the MSP Product and refund
to MSP the fees paid to CA for the same from the point in time that the infringement
first took place.

	 	7.2.	 	CA shall have no liability for infringement to the extent that the infringement results
from (i) CA’s compliance with designs and/or specifications provided by MSP, (ii) use of
other than the current release of the CA Software, if the infringement would have been
avoided by use of the current release and if the infringement occurs more than thirty (30)
days after CA has made a public announcement or notified MSP in writing that a previous
release may infringe, (iii) a modification of the CA Software that was not authorized in
writing by CA, (iv) use of the CA Software in combination with non-CA software, equipment
or data other than as specified in the Documentation or otherwise previously approved in
writing by CA for use with the CA Software, or (v) the furnishing to MSP of any
information, service, or technical support by a third party not authorized by CA.
	 
	 	7.3.	 	THE ABOVE STATES THE ENTIRE LIABILITY OF CA WITH RESPECT TO INFRINGEMENT OF PATENTS,
COPYRIGHTS, TRADEMARKS OR ANY OTHER FORM OF INTELLECTUAL PROPERTY RIGHT BY ANY SOFTWARE
SUPPLIED BY CA.
	 
	 	7.4.	 	MSP Indemnification. MSP shall indemnify, defend and hold harmless CA, its
officers, directors, employees, agents, successors and permitted assigns (“CA Indemnified
Parties”) from and against any and all Damages, to the extent such Damages (a) arise out of
or relate to a claim that the portion of the MSP services developed by MSP without the
assistance of CA (“MSP Indemnifiable Material”) or any portion thereof, infringes,
misappropriates, or otherwise violates any third party’s intellectual property rights;
and/or (b) are based on a claim that any MSP modification or in the event that MSP (i)
caused any personal injury and/or tangible property damage or harm to an End User or End
User’s computer system or privacy; and/or (ii) improperly characterizes, removes or
interferes with third party software, files, data, text or code or any similar claim
including, without limitation, any claim of unfair competition, commercial libel or
defamation, interference with contractual relations, interference with prospective economic
advantages, or any violation of the Lanham Act (as codified in 15 U.S.C. 1125) or similar
state law and or (iii) causes CA Software to be operated in a manner that is inconsistent
to any regulatory, legal requirement that may cause a fine, impairment to CA Software or
cause a third party action.
	 
	 	7.5.	 	Defense and Settlement. Each Party shall give the other Party prompt notice of
any such claim made against it, and the Parties shall cooperate in the defense of any such
claim, suit or proceeding, including appeals, negotiations and any settlement or compromise
thereof, provided that non-indemnifying Party must approve the terms of any settlement or
compromise that may impose any unindemnified or non-monetary liability on such Party.
	 
	 	7.6.	 	Product Tampering. Unless explicitly permitted by applicable legislation, and
except as specifically permitted in this Agreement, MSP shall not, nor shall it permit any
third party to: (i) copy or manufacture the CA Software or any portion thereof; (ii)
translate, adapt, enhance, extend, decompile, disassemble or reverse engineer the CA
Software; or (iii) use the CA Software to provide any facility management or service bureau
service or otherwise use the CA Software to process the data of any third party. MSP
agrees that any such works are derivative works and as such are the sole and exclusive
property of CA or its licensor.
	 
	 	7.7.	 	Allocation of Risk. The parties agree that the indemnities above and the
warranties and limitations of liability mentioned below fully and fairly reflect the
allocation of risk among the parties and the price of the CA Software.
	 
	 	7.8.	 	Confidential Information. The parties agree that any Confidential Information
provided under this Agreement will be held and maintained in strict confidence and shall
disseminate Confidential Information only on a need-to-know basis. The party receiving
Confidential information shall be permitted to disclose Confidential Information in
connection with a judicial or administrative proceeding to the extent that such disclosure
is required under applicable law or court order, provided that the disclosing party shall
be given prompt and

			
	 	 	 
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	 	 	 	timely written notice of any such proceeding and shall offer reasonable cooperation in any
effort of the other party to obtain a protective order.

	 	8.	 	WARRANTIES.

	 	8.1.	 	Statements of Limited Warranty. CA warrants that the CA Software will operate
in accordance with the specification published by CA for the CA Software during the term of
this Agreement. However, if it is determined that the CA Software fails to operate
according to the said specification CA’s only responsibility will be to exercise all
reasonable efforts, consistent with industry standards and with reasonable care and skill,
to cure any defects pursuant to its obligations in Section 5.6 above. Due to the nature of
computer software CA does not warrant that operation will be error-free or uninterrupted.
	 
	 	8.2.	 	Warranty Representations. MSP is not authorized to make any warranty
commitment on CA’s behalf, whether written or oral, other than those contained in the
applicable CA End User Agreement
	 
	 	3.13.	 	LIMITATION OF WARRANTIES. THE WARRANTIES DESCRIBED IN THIS SECTION 8 ARE IN
LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY, SUITABILITY, SATISFACTORY QUALITY AND FITNESS FOR A
PARTICULAR PURPOSE WHICH ARE HEREBY EXCLUDED TO THE MAXIMUM PERMITTED BY LAW.

	 	9.	 	LIMITATION OF LIABILITY.

	 	9.1.	 	Aggregate Liability. Except for death or personal injury caused by the
negligence or willful default of CA or its employees, and subject to Section 9.2 below,
CA’s liability for direct damages to MSP for any cause whatsoever, except as otherwise
stated in this Section, and regardless of the form of action, will be limited to the amount
of royalties paid by MSP for the CA Software that caused the damage or gave rise to the
cause of action calculated from the period of six months prior to the date that the cause
of action arose.
	 
	 	9.2.	 	Exclusive Remedies. The remedies provided in this Agreement are the sole and
exclusive remedies of the parties. In no event shall CA be liable to MSP or any other
party, whether in contract or tort, for any incidental, indirect, special, consequential or
unforeseeable loss or damage (including, without limitation, loss of profits, loss of
business, loss of opportunity, loss or corruption of date), however arising, even if
advised of the possibility of such loss or damages being incurred.
	 
	 	9.3.	 	Third Party Claims. Except for death or personal injury caused by the
negligence or willful misconduct of CA or its employees, CA shall not be liable for any
claim by MSP based on any third party claim.

	 	4.	 	TERMINATION.

	 	9.4.	 	Termination for Cause. Either party may terminate this Agreement for the
substantial breach by the other party of a material term. The terminating party will first
give the other party written notice of the breach and a reasonable period of at least
thirty (30) days in which to cure the alleged breach. If a cure is not achieved during the
cure period, then the non-breaching party may terminate this Agreement upon written notice.
	 
	 	4.1.	 	Termination by CA. CA may terminate this Agreement immediately if MSP fails
to meet its payment obligations under this Agreement and this failure continues for ten
(10) days or more following receipt of written notice from CA.
	 
	 	4.2.	 	Insolvency, Assignment, or Bankruptcy. Subject to any mandatory laws, either
party may terminate this Agreement upon written notice to the other party if the other
party (I) is not paying its debts as such debts generally become due, (ii) becomes
insolvent, (iii) files or has filed against it a petition (or other document) under any
Bankruptcy Law or similar law, that is unresolved within sixty (60) days of the filing of
such petition (or document), (iv) proposes any dissolution, liquidation, composition,
financial reorganization or recapitalization with creditors, (v) makes a general assignment
or trust mortgage for the benefit of creditors, or (vi) if a receiver, trustee, custodian
or similar agent is appointed or takes possession of any of its property or
business. CA may terminate this Agreement if there is a merger, sale of substantially all
of the assets or change of control of MSP. A “change of control” shall be deemed to occur
when an entity acquires fifty percent (50%)

			
	 	 	 
	CA
Initial     /s/ DDG     
	 	MSP
Initial     /s/ JG     
	 	 	 
	Legally approved by CA Shama09	 	 

Page 7 of 15

 

			
	 	 	 
	
	 	MSP AGREEMENT

	 	 	 	or more of the voting shares or equity interest
in MSP or in the event of a change of a majority of the Board of Directors (or majority of
the partners if a partnership) of MSP.

	 	4.3.	 	Acceleration of Payment. Upon termination of this Agreement the due dates of
all outstanding invoices to MSP for licenses of CA Software will automatically be
accelerated so that they become due and payable on the effective date of termination, even
if longer terms had been provided previously. Unless otherwise agreed in writing to the
contrary, all orders or portions of orders remaining un-shipped as of the effective date of
such termination will automatically be canceled.
	 
	 	4.4.	 	Effect of Termination on Obligations. Termination of this Agreement will
not affect any pre-termination obligations of either party under this Agreement, and any
termination is without prejudice to the enforcement of any un-discharged obligations
existing at the time of termination. Regardless of any other provision of this Agreement,
CA will not by reason of the termination of this Agreement be liable for compensation,
reimbursement, or damages on account of the loss of prospective profits on anticipated
sales, or on account of expenditures, investments, leases, or commitments in connection
with MSP’s business or goodwill, or otherwise. Except as set forth herein and below in
Section 10.7, upon expiration or termination of this Agreement, MSP shall terminate any
connections to the functionality of the CA Software provided by MSP to End Users and
immediately return to CA, at MSP’s expense: (i) all copies of the CA Software; (ii) all
Demonstration Software; (iii) all Documentation; (iv) all CA Software brochures, marketing
collateral and materials; and (v) all master copies of the CA Software; together with a
certified statement by a duly authorized officer of MSP stating that all such CA Software
and materials and any other confidential information of CA have been returned to CA or
destroyed. MSP shall take such other reasonable action as may be necessary to remove its
identification as a representative of the CA Software.
	 
	 	4.5.	 	Wind Down Period. In the event of any termination of this Agreement by CA
under Section or termination by MSP under Sections 10.1 or 10.3, MSP shall be entitled to
provide managed services to End Users for a period not to exceed ninety (90) days subject
to its continuing compliance with all terms and conditions of this Agreement.

	 	5.	 	GENERAL PROVISIONS.

	 	9.5.	 	Force Majeure. If either party is prevented from performing any portion of
this Agreement (except the payment of money) by causes beyond its control, including civil
commotion, war, governmental regulations or controls, casualty, inability to obtain
materials or services or acts of God, such defaulting party will be excused from
performance for the period of the delay and for a reasonable time thereafter.
	 
	 	9.6.	 	Choice of Law / Jurisdiction. The laws of the State of New York (excluding its
conflict of laws provisions) shall govern the construction and enforceability of this
Agreement. The parties agree that any action arising under or relating to this Agreement
or the Products shall lie within the exclusive jurisdiction of the State and Federal Courts
located in Suffolk County, New York. MSP consents to the exercise of jurisdiction by any
such court and agrees that process may be served on MSP in any such action by mailing same
to MSP at the address set forth above. If either party is compelled to seek judicial
enforcement of its rights under this Agreement, the prevailing party in any such action
shall be entitled to recover its costs incurred in such action, including reasonable
attorneys’ fees. The United Nations Convention on Contracts for the International Sale of
Goods will not apply to this Agreement.
	 
	 	9.7.	 	Survival of Terms. The provisions of this Agreement that by their nature
extend beyond the Expiration Date or other termination of this Agreement will survive and
remain in effect until all obligations are satisfied.
	 
	 	9.8.	 	Export Compliance: Regardless of any disclosure made by MSP of an ultimate
destination of any CA Software, MSP warrants that MSP will not export or disclose directly
or indirectly the CA Software or related technical information, documents or materials, or
any direct product thereof, without the prior written consent, if required, of the US
Department of Commerce. MSP further warrants that it will agree to comply with any other
applicable import or export laws and regulations and ensure its MSP End Users abide by the
terms contained in this clause. In addition, in the event CA consents to the exportation
of the CA Software by MSP
outside the Territory, MSP shall obtain all applicable licenses. MSP shall take all
necessary steps to assure that CA obtains full protection of its intellectual property
rights under these provisions.

			
	 	 	 
	CA Initial     /s/ DDG     
	 	MSP Initial     /s/ JG     
	 	 	 
	Legally approved by CA Shama09	 	 

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	 	9.9.	 	Waiver. No waiver of any right or remedy on one occasion by either party will
be deemed a waiver of that right or remedy on any other occasion.
	 
	 	9.10.	 	Superior Agreement. This Agreement will not be supplemented or modified by
any course of dealing or usage of trade. Variance from or addition to the terms and
conditions of this Agreement in any purchase order or other written notification from MSP
(including but not limited to any specification of a price different than CA’s current list
price, less the appropriate discount) will be of no effect, unless otherwise expressly
provided in this Agreement. This Agreement may be amended or modified only by a writing
signed by each party.
	 
	 	9.11.	 	Assignment. This Agreement is not assignable by MSP, in whole or in part,
without CA’s prior written consent. Any attempted assignment without CA’s written consent
will be null and void.
	 
	 	9.12.	 	Notice. Unless otherwise agreed to by the parties, all notices required under
this Agreement (except those relating to product pricing, changes and upgrades) will be
deemed effective when received and made in writing by either (i) registered mail, (ii)
certified mail, return receipt requested (or equivalent), (iii) overnight mail, addressed
and sent to the address indicated in the Agreement (or subsequently notified in writing)
and to the attention of the party executing this Agreement or that person’s successor, or
(iv) by telephone facsimile transfer appropriately directed to the attention of the party
executing this Agreement or that person’s successor.
	 
	 	9.13.	 	Compliance with Laws. Each party shall be responsible to comply with all
applicable laws and regulations.
	 
	 	9.14.	 	Reservation of Title. If MSP acquires inventory of CA Software under this
Agreement, all such inventory shall remain the title and property of CA until CA has
received full payment for the same. Any master media provided by CA to MSP shall at all
times remain the property of CA and MSP shall return the same to CA upon termination or
expiry of the Agreement.
	 
	 	9.15.	 	Severability. If any term, provision, covenant or condition of this Agreement
is held invalid or unenforceable for any reason, the remainder of the provisions will
continue in full force and effect as if this Agreement had been executed with the invalid
portion eliminated. The parties further agree to substitute for the invalid provision a
valid provision that most closely approximates the intent and economic effect of the
invalid provision.
	 
	 	9.16.	 	Independent Contractors. Each party acknowledges that the parties to this
Agreement are independent contractors and that it will not, except in accordance with this
Agreement, represent itself as an agent or legal representative of the other.
	 
	 	9.17.	 	Headings and Precedence. The headings provided in this Agreement are for
convenience only and will not be used in interpreting or construing this Agreement. In the
event of any conflict between the terms of this Agreement and any Exhibit or addendum
hereto, the terms of the Exhibit or addendum shall prevail.
	 
	 	5.1.	 	No Other Terms. This Agreement, its Exhibits and the documents referred to herein
comprise the whole Agreement between the parties. All prior oral or written agreements or
representations other than as included in this Agreement are hereby excluded from this
Agreement.

THE PARTIES REPRESENT THAT THEY HAVE READ THIS AGREEMENT AND AGREE TO BE BOUND BY ITS TERMS AND
CONDITIONS.

	 	 	 	 	 	 	 	 	 	 	 
	Accepted by: CA, Inc.	 	 	 	InterNetwork Experts, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signed:

	 	/s/ David D. Gruennert	 	 	 	Signed:	 	/s/ Jonathan A. Groves	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	David D. Gruennert	 	 	 	Name:	 	Jonathan A. Groves	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Vice President Finance	 	 	 	Title:	 	Director, NetSurant Operations	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	3/30/06	 	 	 	Date:	 	3/21/06	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

			
	 	 	 
	CA
Initial     /s/ DDG     
	 	MSP
Initial     /s/ JG     
	 	 	 
	Legally approved by CA Shama09	 	 

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	 	MSP AGREEMENT

EXHIBIT A

SPECIFICATIONS FOR USAGE OF CA PRODUCTS

CA SOFTWARE

	 	 	 	 	 	 	 
	 	 	USE	 	OPERATING	 	SHIPMENT
	SECTION 1 PROGRAMS	 	AUTHORIZATION	 	SYSTEM	 	REQUIRED
	CA End-to-End Performance Console
	 	2 Tier-2	 	Windows 2003	 	Yes
	CA Real-Time Perforamance Monitor
	 	1 Tier-1	 	Windows 2003	 	Yes
	CA Performance Management Elements Universal
	 	4,000 Elements	 	Windows 2003	 	Yes
	CA Performance Management Application Performance
Modules
	 	2 Systems	 	Windows 2003	 	Yes
	VOIP Handsets, consisting of the following components:
	 	10,000 Handsets	 	Windows 2003	 	Yes
	CA Voice Management for Cisco Call Manager
	 	 	 	 	 	 
	CA Voice Management for Cisco Unity Bridge –
Platform 1
	 	 	 	 	 	 
	CA SNMP Agent for Systems
	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	USE	 	OPERATING	 	SHIPMENT
	SECTION 2 PROGRAMS	 	AUTHORIZATION	 	SYSTEM	 	REQUIRED
	Unicenter Remote Control

	 	8 Tier-2 Servers
	 	Windows 2003
	 	No
	Unicenter Service Plus Service Desk

	 	10 Users
	 	Windows 2003
	 	No
	Unicenter Management Portal

	 	1 Tier-2 Server
	 	Windows 2003
	 	No
	Unicenter Advanced Network Operations *

	 	1 Tier-2 Server
	 	Windows 2003
	 	No
	Unicenter Network & Systems Management

	 	11 Tier-2 Servers
	 	Windows 2003
	 	No
	Unicenter Network & Systems Management Systems 

Performance Option *

	 	1 Tier-2 Server
	 	Windows 2003
	 	No
	Unicenter Network & Systems Management Network 

Performance Option *

	 	1 Tier-2 Server
	 	Windows 2003
	 	No
	Unicenter Service Level Management

	 	1 Tier-2 Server
	 	Windows 2003
	 	No
	Cleverpath Report for Unicenter

	 	1 Site
	 	Windows 2003
	 	No
	Unicenter Mgmt for Microsoft Exchange – Exchange Server

	 	1 Tier-1 Server
	 	Windows 2003
	 	No
	Unicenter Mgmt for Microsoft Exchange – Mailbox

	 	300 Users
	 	Windows 2003
	 	No

 

			
	(*)	 	Maintenance and Support for the specified CA Software expires on March 29, 2007

PRODUCT DELIVERY

Any CA Software identified with “NO” under the heading entitled “Shipment Required” above was
previously delivered to MSP by CA and therefore will not be delivered to MSP at this time. CA
Software identified with a “YES” under such heading will be delivered to MSP upon execution of this
agreement. The CA Software shall be delivered to MSP, either by electronic delivery or in tangible
media F.O.B. Point of Shipment, as CA deems appropriate.

MSP OPERATIONS CENTER (OC) INSTALLATION SITE

1955 Lakeway Drive, Suite 220, Lewisville, TX 75057

TERRITORY (include target market if appropriate): North America

FEES

MSP shall pay to CA a fee inclusive of usage and maintenance of the CA Software through the
expiration of the Term, in the amount of $ 401,346.00, payable as follows:

	 	 	 	 	 
	Due Date	 	Amount Due
	March 30, 2006

	 	$	138,140.00	 
	March 30, 2007

	 	$	131,603.00	 
	March 30, 2008

	 	$	131,603.00	 

Nothing herein shall affect MSP’s obligation to pay the License Fee and UMF (or MF, as applicable)
as provided in the License.

			
	 	 	 
	CA Initial     /s/ DDG     
	 	MSP Initial     /s/ JG     
	 	 	 
	Legally approved by CA Shama09	 	 

Page 10 of 15

 

			
	 	 	 
	
	 	MSP AGREEMENT

Thereafter, (a) continued usage and maintenance of the Section 1 Programs shall be subject to MSP’s
payment of CA’s annual usage and maintenance fee, and (b) continued usage of the Section 2 Programs
shall not require further payment although continued maintenance of the Section 2 Programs shall be
subject to MSP’s payment of CA’s annual maintenance fee.

EFFECTIVE DATE: March 30, 2006

EXPIRATION DATE: March 29, 2009

SPECIAL TERMS

MSP and CA agree that the following terms and conditions amend and supplement the MSP Agreement and
in the event of conflict the following shall prevail:

LICENSE TERMINATION

All Licenses and Order Forms respecting use of the CA Software granted to MSP by CA or any of its
predecessors for use at the installation site set forth above are hereby terminated, subject,
however, to the obligations of MSP (a) to pay all contracted payments which otherwise would have
become due and payable, and (b) to maintain the confidentiality of the CA Software and comply with
the non-disclosure provisions of such terminated Licenses. Any future use of or access to the CA
Software by MSP at any MSP Operations Center Installation Site shall be controlled exclusively by
the terms of this Agreement.

SUPPLEMENTAL FEES

MSP may increase the Use Authorization during the Term upon prior written notice to CA and payment
of CA’s one-time supplemental license fee calculated as CA’s then prevailing fee schedule, with the
exception of the CA Software in the below table. Notwithstanding any installment payment schedule
for the initial Fees, the Supplemental Fees shall be paid within thirty (30) days after MSP’s
receipt of CA’s invoice. The Supplement Fees shall be pro rated until the next anniversary of the
Effective Date of the License and shall be payable in full annually thereafter. The Supplemental
Fees shall be billable upon MSP giving CA notice of its desire to increase the Use Authorization,
including by request that CA issue an authorization key.

	 	 	 	 	 
	CA Performance Management	 	 	 	Supplemental Fee per Element
	Elements Universal	 	Cumulative # of Elements	 	(includes Maintenance & Support)
	 
	 	Up to 4,999	 	$10.00
	 
	 	5,000 –   9,999	 	$9.00
	 
	 	10,000 – 14,999	 	$8.10
	 
	 	15,000 – 19,999	 	$7.29
	 
	 	20,000 – 24,999	 	$6.56
	 
	 	25,000 +	 	$5.90

	 	 	 	 	 
	VOIP Handsets	 	Cumulative # of Handsets	 	Supplemental Fee per Handset (in
	With or without the CA Software	 	 	 	increments of 1,000; includes Maintenance
	Components	 	 	 	& Support)
	 
	 	Up to 9,999	 	$7.00
	 
	 	10,000 – 14,999	 	$6.30
	 
	 	15,000 – 19,999	 	$5.67
	 
	 	20,000 – 24,999	 	$5.10
	 
	 	25,000 +	 	$4.59

			
	 	 	 
	CA Initial     /s/
DDG     
	 	MSP
Initial     /s/ JG     
	 	 	 
	Legally approved by CA Shama09	 	 

Page 11 of 15

 

			
	 	 	 
	
	 	MSP AGREEMENT

EXHIBIT B

MSP SUPPORT ADDENDUM

I. DEFINITIONS:

	 	•	 	CA Customer Support – The CA Global organization responsible for providing technical
support services to our customers and Partners.
	 
	 	•	 	Incident – A single and specific request for technical support assistance that is
tracked by an Incident number associated with an Incident tracking system.
	 
	 	•	 	Normal Business Hours – 9am to 5pm ET Monday through Friday (excluding U.S. Holidays).
	 
	 	•	 	SupportConnect – CA’s online support Incident management infrastructure which provides
online access to StarTrak, CA’s voice related support Incident tracking system.
	 
	 	•	 	Sustaining Engineering – The division within CA Development responsible for the
development of patches, bugs, fixes, and other code-related remedies.

Support Defined:

The technical support functions described herein include the following functions:

	•	 	Answering CA Software installation, configuration or usage questions.
	 
	•	 	Capturing initial problem definition and failure information.
	 
	•	 	Isolating and identifying software problems.
	 
	•	 	Providing standard fixes and workarounds to known problems.
	 
	•	 	Providing solutions for complex problems.
	 
	•	 	Escalating unresolved problems or those requiring formal fixes to Sustaining Engineering as appropriate.

II. TERMS AND CONDITIONS:

MSP Agrees:

	0.	 	MSP acknowledges that proper marketing and support of the CA Software is largely dependent on
appropriate training of MSP sales and technical staff. MSP shall ensure that members of its
sales and technical staff complete and maintain sufficient training regarding the CA Software
as necessary to properly market the CA Software and provide Tier 1 Support to End Users. In
the event that trained staff are reassigned to other duties or leave the employ of MSP, MSP
shall promptly cause other employees to undergo the necessary minimum training programs. MSP
will indemnify and defend CA against all damages, fines, costs, fees, expenses and judgments
that may be rendered or assessed against CA as a result of an error or omission on the part of
MSP relating to its performance hereunder.
	 
	1.	 	MSP agrees to make best efforts to develop and maintain a level of proficiency within MSP
technical support staff and meet all certifications publicly communicated by CA for the
purpose of supporting professional development relevant to CA Software supported by MSP, as
well as to address concerns where verifiable Incident data supports a training requirement
that may be developing.
	 
	2.	 	MSP agrees to make all reasonable attempts to identify, isolate, troubleshoot and resolve all
technical support concerns reported by End Users as described in the Roles and
Responsibilities section below. If the Incident is above the technical expertise of MSP’s
support staff, CA Customer Support will provide technical support assistance directly to the
MSP as is reasonably required.
	 
	3.	 	MSP agrees to document and track all requests from End Users for the purposes of quality
review and training needs assessment through MSP’s current Incident management solution.
	 
	4.	 	MSP agrees to make best efforts to notify End Users of urgent CA Software notifications,
alerts, bulletins, maintenance and/or release information to ensure End Users are maintaining
current CA Software maintenance levels.
	 
	5.	 	MSP agrees to make best efforts to evaluate End User satisfaction and provide semi-annual
reports to evaluate such satisfaction in accordance with MSP’s current customer service survey
or evaluation practices, and to share the results of those customer service surveys or
evaluation activities with CA.
	 
	6.	 	MSP agrees not to disclose any CA phone numbers or contact methods with any End User without
prior written consent from CA.
	 
	 	 	CA Agrees:
	 
	7.	 	CA agrees to provide MSP with historical Incident related statistics to facilitate staffing
and impact assessment. This includes, but is not necessarily limited to Incident categories,
resolution criteria, volumes of Incidents against distributed licenses, and other factors that
may help MSP understand and plan for delivery of technical support.
	 
	8.	 	CA will make continuous on-going training available to MSP on a reasonable basis. Training,
which shall include the provision of written training materials, is available from CA at CA’s
standard rate per person, per day for regularly scheduled training

			
	 	 	 
	CA
Initial     /s/ DDG     
	 	MSP
Initial     /s/ JG     
	 	 	 
	Legally approved by CA Shama09	 	 

Page 12 of 15

 

			
	 	 	 
	
	 	MSP AGREEMENT

	 	 	conducted at a CA training
facility or an MSP facility, which may be located in the US or in Canada. MSP may also choose
to take other CA certified training from other sources. MSP shall bear its own travel and
subsistence expenses in connection with such training.
	 
	9.	 	CA agrees to make all reasonable attempts to provide MSP with relative historical Incident
data to support the development of End User self-service including, raw knowledge, knowledge
utilization statistics, and access to online knowledge. CA will not “republish” existing
knowledge to reflect MSP marketing or branding.
	 
	10.	 	CA agrees to provide and maintain within its reasonable commercial efforts, a CA Customer
Support advocate outside of the CA Software support chain, within the CA Customer Support
organization, to represent the MSP management team to CA Customer Support on issues outside of
normal CA Software support activities.
	 
	11.	 	CA agrees to notify in writing, and in advance of six (6) months, intentions to discontinue
support for any currently supported CA Software contractually distributed by MSP.

MSP and CA Agree:

	12.	 	MSP and CA mutually agree to establish a target Incident volume per month reported to CA
Customer Support, and MSP agrees to make all reasonable efforts to maintain the target levels.
Target will be a measurement of percentage of Incidents vs. licenses distributed over the term
of the Agreement. Incidents associated with code defect will not be considered in any factor.
	 
	13.	 	MSP and CA agree that the scope of the CA Customer Support obligation shall extend to provide
technical support to MSP exclusively and not to End Users.
	 
	14.	 	CA shall provide MSP with Maintenance Releases of the CA Software made generally available by
CA during the Term of the Agreement. MSP shall be responsible for distributing the
Maintenance Releases only to End Users properly licensed to use the CA Software in accordance
with this Agreement.
	 
	15.	 	CA may provide MSP with New Versions of the CA Software made generally available by CA during
the Term of this Agreement. MSP may distribute the New Versions only to End Users properly
licensed to use the CA Software in accordance with this Agreement.
	 
	16.	 	MSP and CA agree to make any and all reasonable attempts to share or communicate, Incident or
problem resolution related information that will support future enhancements to the CA
Software set-up, installation, configuration, help files or make other such reasonable
enhancements to support related End User self-service infrastructure, to reduce Incident
volumes to both MSP and CA through the mutual improvement of the End User experience. CA will
not provide information outside the scope of the direct relationship between MSP and CA.
	 
	17.	 	MSP and the Customer Support advocate agree to conduct, upon the reasonable request of either
party, quarterly reviews of the overall effectiveness of the CA Customer Support relationship,
identify areas for improvement and identify potential training requirements. This includes a
review of performance statistics for relevant areas of the relationship provided by a CA
Customer Support Senior Manager from MSP and CA. All available metrics should be used to
evaluate the effectiveness of the support relationship including, but not necessarily limited
to:

	 	•	 	License distribution
	 
	 	•	 	End User quantities
	 
	 	•	 	Incident volumes
	 
	 	•	 	Incident telephony (ACD or Other) statistics
	 
	 	•	 	Resolution criteria
	 
	 	•	 	MSP experience
	 
	 	•	 	Escalation details
	 
	 	•	 	Incident or problem details

III. ROLES AND RESPONSIBILITIES:

	 	 	 	 	 	 	 
	MSP Delivers	 	CA Delivers	 	Level of Support Definition
	X

	 	 	 	Tier 1 / Level 1

MSP Client Assistant
	 	Level 1 Support
includes the
initial response to
an End User
reported Incident
(and any follow-up
response as
appropriate),
initial information
gathering,
entitlement and
escalation to Level 2.
	 
	 	 	 	 	 	 
	X

	 	 	 	Tier 1 / Level 2
	 	Level 2 Support
includes some or
all of the
following:
	 

	 	 	 	MSP Support Engineer
	 	answering software
installation,
configuration or
usage questions;
initial problem and
failure information
gathering; problem
isolation,
identification,
and/or providing
standard fixes and
workarounds to
known problems;
escalating
unresolved problems
to a CA Support Engineer.

			
	 	 	 
	CA
Initial     /s/ DDG     
	 	MSP
Initial     /s/ JG     
	 	 	 
	Legally approved by CA Shama09	 	 

Page 13 of 15

 

			
	 	 	 
	
	 	MSP AGREEMENT

	 	 	 	 	 	 	 
	MSP Delivers	 	CA Delivers	 	Level of Support Definition
	 

	 	X
	 	Tier 2 / Level 3

CA Support Engineer
	 	Level 3 Support
consists of, but is
not limited to,
problem isolation,
identification, and
replication;
providing standard
fixes and
workarounds to
known problems;
providing remedies
for both new and
known complex
problems;
escalating
unresolved problems
or those requiring
formal fixes to CA
Sustaining
Engineering.
	 

	 	X
	 	Tier 2 / Level 4

CA Sustaining

Engineering
	 	Level 4 Support
consists of
advanced and
engineering level
problem isolation,
identification, and
replication for
complex problems;
providing new fixes
and workarounds to
problems; providing
remedies for both
new and known
complex problems;
resolution of
problems through
the generation of
formal fixes; and
assistance and
repair requiring
knowledge of
software source
code.

Contact Retention and Transfer Policy:

MSP will retain ownership of the relationship with the End User. During the first sixty (60) days
after the launch date, “warm” telephone conference calls will be used to facilitate training and
development for MSP. This conference call shall consist of MSP, End User and a CA Support
Engineer. Thereafter, MSP can implement a transfer policy of “warm” telephone conference /
transfer or web submission of Incidents via CA’s web-based portal http://SupportConnect.ca.com.

MSP shall submit detailed descriptions of any reported errors. If CA is not able to replicate the
error, MSP shall provide any additional information required by CA, which may include a sample
program enabling replication of the error. MSP will also make its personnel available to assist in
problem identification and resolution.

IV. ENGAGEMENT PROCESS:

Telephone:

CA Customer Support is available 24 hours per day, 7 days per week, and 365 days per year.
Engaging CA technical support can be facilitated via telephone by way of “warm transfer” or “warm
conference”.

SupportConnect:

Online CA Customer Support is available via CA’s web-based portal at http://SupportConnect.ca.com.

Incident Severities and SupportConnect Target Response Times:

	 	 	 	 	 
	 	 	 	 	Response Times During
	Severity	 	Definition	 	Normal Business Hours*
	1**

	 	A “system down” or product
inoperative condition
impacting production.
Examples include system
crashes, and loss or
corruption of data.
	 	1 Hour
	 
	 	 	 	 
	2

	 	A high-impact condition
associated with the product.
Examples include missing
functionality, errors, and
significant performance
degradation.
	 	2 Hours
	 
	 	 	 	 
	3

	 	A low-impact condition
associated with the product.
Examples include minor
documentation issues, and
confusion over error
messages.
	 	4 Hours
	 
	 	 	 	 
	4

	 	A question about product use
or implementation. Examples
include minor errors,
cosmetic changes or
enhancements.
	 	8 Business Hours (or 1

Business Day)

 

			
	*	 	CA will use its reasonable efforts to meet the Target Response Times and/or set MSP expectation
with regard to remedial software support.
	 
	**	 	MSP technical contact must remain available to work on a Severity 1 issue 24 hours a day for the
issue to retain a Severity 1 status. If an MSP technical contact is unavailable, CA Customer
Support will re-categorize the Incident Severity level to a Severity 2.

Incident Requirements:

CA Software support requests must contain all pertinent information in English including Customer
Site ID, Software/Revision number, Operating system/version, Platform, Problem Description, Log
Files/Test Case, Problem Severity and a technical contact that is familiar with the software
problem and End User environment. MSP must execute diagnostic routines if provided by CA and
inform CA of the results. MSP must also verify the existence of a software problem and provide the
conditions in which the problem may be duplicated.

			
	 	 	 
	CA
Initial     /s/ DDG     
	 	MSP
Initial     /s/ JG     
	 	 	 
	Legally approved by CA Shama09	 	 

Page 14 of 15

 

			
	 	 	 
	
	 	MSP AGREEMENT

V. THREAT OUTBREAK:

CA shall make any and all reasonable attempts to resolve any identified Threat Outbreak as
expeditiously as possible. CA will provide MSP with direct access to CA’s Threat Research and
Development Center via the CA Security Advisor 24 hours per day, 7 days per week, 365 days per
year.

VI. ESCALATION PROCEDURE:

Any Incident in which the End User indicates they have a critical situation can be escalated as
follows:

	0.	 	The first mechanism is an escalation within the assigned technician relationship. This is
done by communicating with the CA Support Engineer assigned to the Incident through Incident
updates via telephone or http://SupportConnect.ca.com.
	 
	1.	 	The second mechanism is to formally change the severity of the Incident in question. This
can be done by asking the CA Support Engineer to upgrade the Incident severity or by calling
Customer Support and asking the Client Assistant to upgrade the Incident severity and
requesting a CA Support Engineer call back. This will generate an alert to the change in
severity.

	 	•	 	Note that a Severity 1 status will only be maintained while the MSP is present to work
on the Incident unless there are clearly no actions items remaining that relate to the MSP.
Severity 1 status will not remain in effect if communication failures occur and in
Incidents where an MSP is unresponsive, or not available to work with Customer Support.

	2.	 	The third mechanism is to call CA Customer Support and request the Incident be escalated to
the attention of the Support Supervisor.
	 
	4.	 	The escalation path is the same during business and non-business hours; however CA Senior
Management is only available during normal business hours.

     Escalation Path:

	 	•	 	Support Engineer (24x7x365)
	 
	 	•	 	Support Supervisor (24x7x365)
	 
	 	•	 	Support Manager (24x7x365)
	 
	 	•	 	Partner Operations Manager (Normal Business Hours)
	 
	 	•	 	Director Partner Operations (Normal Business Hours)
	 
	 	•	 	Vice President Global Support Operations (Normal Business Hours)
	 
	 	•	 	Senior Vice President Customer Support (Normal Business Hours)

VII. REPORTING REQUIREMENTS:

Standard Reporting through CA Partnership Summary.

			
	 	 	 
	CA
Initial     /s/ DDG     
	 	MSP
Initial     /s/ JG     
	 	 	 
	Legally approved by CA Shama09	 	 

Page 15 of 15

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