COLLATERAL AGREEMENT

Reference is made to the Lien Subordination and Intercreditor Agreement dated as of June 9, 2008, among General Electric Capital Corporation, as Collateral Agent for the Revolving Facility Secured Parties referred to therein; U.S. Bank National Association, as Trustee and as Noteholder Collateral Agent; Ply Gem Industries, Inc.; Ply Gem Holdings, Inc.; and the other subsidiaries of Ply Gem Industries, Inc. named therein (the “Intercreditor Agreement”).  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 and, to the extent provided therein, the applicable Senior Secured Obligations Security Documents (as defined in 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 control.

COLLATERAL AGREEMENT, dated as of June 9, 2008, among PLY GEM INDUSTRIES, INC., a Delaware corporation (the “ Issuer ”), PLY GEM HOLDINGS, INC., a Delaware corporation (“ Holdings ”), the other Persons listed on Schedule I hereto (Holdings and the Persons so listed being, collectively, the “ Guarantors ” and together with the Issuer, the “ Grantors ”) and U.S. BANK NATIONAL ASSOCIATION, as Noteholder Collateral Agent under the Indenture referred to herein (in such capacity, the “ Noteholder Collateral Agent ”).

(1)           The Issuer, Holdings and the other Grantors party thereto have entered into (a) an Indenture dated of even date herewith (said Indenture, as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time, being the “ Indenture ”) with U.S. Bank National Association, as trustee (in such capacity, the “ Trustee ”) and as Noteholder Collateral Agent and (b) a Purchase Agreement, dated as of June 2, 2008 (the “ Purchase Agreement ”), among the Issuer, Holdings, the Guarantors and the Initial Purchasers named therein (the “ Initial Purchasers ”).

(2)           Pursuant to the Indenture, the Grantors are entering into this Agreement in order to grant to the Noteholder Collateral Agent for the ratable benefit of the Secured Parties a security interest in the Collateral (as hereinafter defined) to secure the Obligations.

(3)           It is a condition precedent to the purchasing of the Notes by the Initial Purchasers that the Grantors shall have granted the assignment and security interest and made the pledge and assignment contemplated by this Agreement.

(4)           Each Grantor will derive substantial direct and indirect benefit from the transactions contemplated by the Purchase Agreement and the Indenture.

(5)           Terms defined in the Indenture or the Intercreditor Agreement and not otherwise defined in this Agreement are used in this Agreement as defined in the Indenture or the Intercreditor Agreement, as applicable.  Further, unless otherwise defined in this Agreement or in the Indenture or Intercreditor Agreement, terms defined in Article 8 or 9 of the UCC (as defined below) are used in this Agreement as such terms are defined in such Article 8 or 9 (including Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims, Commodity Account, Commodity Contract, Deposit Accounts, Documents, Equipment, Farm Products, Financial Assets, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit Rights, Securities Accounts, Securities Intermediary, Security, Security Entitlements and Supporting Obligations).  Additionally, the following terms shall have the following meanings:

“ Account Debtor ” shall mean a Person who is obligated under an Account, Chattel Paper or General Intangible.

“ Commodity Account Control Agreement ” shall mean an agreement in form reasonably satisfactory to the Controlling Agent sufficient to grant the Controlling Agent Control over a specified Commodity Account.

“ Control ” shall mean (i) in the case of each Deposit Account, “control,” as such term is defined in Section 9-104 of the UCC, (ii) in the case of any Security Entitlement, “control,” as such term is defined in Section 8-106 of the UCC and (iii) in the case of any Commodity Contract, “control,” as such term is defined in Section 9-106 of the UCC.

“ Control Agreements ” shall mean, collectively, the Deposit Account Control Agreements, the Securities Account Control Agreements and the Commodity Account Control Agreements.

“ Controlling Agent ” shall mean (i) (x) in the case of any Asset Sale Proceeds Account or (y) following the Discharge of Senior Secured Obligations (where Revolving Facility Obligations constitute Senior Secured Obligations), the Noteholder Collateral Agent and (ii) in all other cases, the Bank Collateral Agent.

“ Deposit Account Control Agreement ” shall mean an agreement in form reasonably satisfactory to the Controlling Agent sufficient to grant the Controlling Agent Control over a specified Deposit Account.

“ Dominion Account ” means any Deposit Account of a Grantor at the Controlling Agent or its Affiliates or branches or another bank acceptable to the Controlling Agent, in each case which is subject to a Deposit Account Control Agreement.

“ Excluded Accounts ” shall mean each of the following, but in each case only to the extent that Control of the same has not been provided to or for the benefit of any other creditor or as security for any other obligations:

(i)           all Deposit Accounts maintained by the Grantors solely for the purpose of making current payments of payroll obligations in the ordinary course of business;

(ii)           for a period of not more than 30 days (or such longer period as may be approved by the Controlling Agent in its sole discretion) after a Person becomes a Guarantor, the Deposit Accounts, Securities Accounts and Commodity Accounts of such new Guarantor; and

(iii)           any Deposit Accounts, Securities Accounts and Commodity Accounts (in each case other than Asset Sale Proceeds Accounts) as to which (A) during the first 90 days following the Issue Date, the aggregate book balances thereof, taken as a whole, do not exceed $5,000,000, and (B) thereafter, the aggregate collected balances thereof, taken as a whole, do not exceed $5,000,000 (or such greater amount as may be agreed from time to time by the Noteholder Collateral Agent in its discretion).

(a)           the right to receive any payment of money (including Accounts, General Intangibles and Payment Intangibles) or any other rights referred to in Sections 9-406, 9-407, 9-408, 9-409 of the UCC to the extent that such sections of the UCC are effective to limit the prohibitions which make such property “Special Property”;

(b)           any Proceeds, substitutions or replacements of any Special Property (unless such Proceeds, substitutions or replacements would constitute Special Property).

“ Excluded Equity ” means Equity Interests solely to the extent:

(a)           in excess of 66% of the issued and outstanding voting Equity Interests of any Foreign Subsidiary; or

(b)           the inclusion of such Equity Interests in the Collateral would require separate financial statements for a Subsidiary of Holdings or the Issuer to be filed with the SEC (or any successor federal agency) pursuant to Rule 3-16 of Regulation S-X (or any successor law or regulation), as in effect from time to time.

“ Lien Waiver ” means an agreement, in form and substance reasonably satisfactory to the Controlling Agent, by which (a) for any Collateral located on leased premises, the lessor waives or subordinates any Lien it may have on the Collateral, and agrees to permit the Controlling Agent to enter upon the premises and remove the Collateral or to use the premises for an agreed upon period of time to store or dispose of the Collateral; (b) for any Collateral held by a warehouseman, processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral, agrees to hold any documents in its possession relating to the Collateral as agent for the Controlling Agent, and agrees to deliver the Collateral to the Controlling Agent upon request and (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges the Controlling Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and agrees to deliver the Collateral to the Controlling Agent upon request.

“ Majority Noteholders ” means the Holders of 25% or more of the outstanding principal amount of the Notes issued under the Indenture.

“ Note Documents ” means the Indenture (including the Note Guarantees set forth therein), the Notes, this Agreement, the other Noteholder Security Documents, the Intercreditor Agreement and the other documents and instruments executed and delivered pursuant to the foregoing, as such documents and instruments may be amended, amended, restated, supplemented or otherwise modified from time to time.

“ Obligations ” means (a) the Indebtedness evidenced by the Notes and all obligations in respect thereof, including principal, premium (if any), interest (including Additional Interest, if any, and interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer or any Guarantor whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, Guarantees and all other amounts payable thereunder or in respect thereof, and (b) any other obligations of the Issuer or any Guarantor under the Indenture or any other Note Document.

“ Payment Item ” means each check, draft or other item of payment payable to a Grantor, including those constituting proceeds of any Collateral.

“ Release Date ” shall have the meaning specified in Section 20.

“ Secured Parties ” means, collectively, (a) the Holders (as defined in the Indenture), (b) the Trustee, (c) the Noteholder Collateral Agent, (d) each other Person that holds, or is an obligee in respect of, any Obligations, and (e) the successors and assigns of each of the foregoing.

“ Securities Account Control Agreement ” shall mean an agreement in form reasonably satisfactory to the Controlling Agent sufficient to grant the Controlling Agent Control with respect to a specified Securities Account.

“ UCC ” shall mean the Uniform Commercial Code (as defined in the Indenture).

NOW, THEREFORE, in consideration of the premises and in order to induce the Initial Purchasers to purchase the Notes and the Trustee and Noteholder Collateral Agent to enter into the Indenture, each Grantor hereby agrees with the Noteholder Collateral Agent for the ratable benefit of the Secured Parties as follows:

Section 1.   Grant of Security .  Each Grantor hereby grants to the Noteholder Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in, such Grantor’s right, title and interest in and to the following, in each case, as to each type of property described below, whether now owned or hereafter acquired by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the “ Collateral ”):

(a)   all Accounts;

(b)   all cash and Cash Equivalents;

(c)   all Chattel Paper;

(d)   all Commercial Tort Claims (including, without limitation, the Commercial Tort Claims set forth on Schedule 14 to the Perfection Certificate);

(e)   all Deposit Accounts;

(f)   all Documents;

(g)   all Equipment;

(h)   all Farm Products;

(i)   all Fixtures;

(j)   all General Intangibles;

(k)   all Goods;

(l)   all Instruments;

(m)   all Inventory;

(n)   all Letter-of-Credit Rights (together with all Accounts, Chattel Paper, Instruments, Deposit Accounts, General Intangibles  and other obligations of any kind, whether or not arising out of or in connection with the sale or lease of goods or the rendering of services and whether or not earned by performance, the “ Receivables ”; and all rights now or hereafter existing in and to all supporting obligations and in and to all security agreements, mortgages, Liens, leases, letters of credit and other contracts securing or otherwise relating to the Receivables, being the “ Related Contracts ”);

(o)   the following (the “ Security Collateral ”):

(i)   all indebtedness from time to time owed to such Grantor, including without limitation, all promissory notes or instruments, if any, evidencing such indebtedness, all indebtedness owed to such Grantor pursuant to the Intercompany Note and the instruments set forth on Schedule 8 to the Perfection Certificate (the “ Pledged Debt ”), and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Debt;

(ii)   all Equity Interests, other than Excluded Equity, from time to time acquired, owned or held by such Grantor in any manner, including, without limitation, the Equity Interests of each Grantor set forth opposite such Grantor’s name on and otherwise described on Schedule 7 to the Perfection Certificate, and the certificates, if any, representing such shares or units or other Equity Interests (collectively, the “ Pledged Equity ”), and all dividends, distributions, return of capital, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares or other Equity Interests and all subscription warrants, rights or options issued thereon or with respect thereto; and

(iii)   all Investment Property and all Financial Assets (including, without limitation, all securities, security entitlements and securities accounts), the certificates or instruments, if any, representing or evidencing such Investment Property or Financial Assets and all dividends, distributions, return of capital, interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange therefor and all subscription warrants, rights or options issued thereon or with respect thereto;

provided, however, that (i) the Equity Interests and other securities of a Subsidiary will constitute Security Collateral only to the extent that such Equity Interests and other securities can secure the Notes without Rule 3-16 of Regulation S-X under the Securities Act (“ Rule 3-16 ”) (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other governmental agency); (ii) in the event that Rule 3-16 requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or

regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary due to the fact that such Subsidiary’s Equity Interests or other securities constitute Security Collateral, then such Equity Interests or other securities shall automatically be deemed not to be Security Collateral, but only to the extent necessary to not be subject to such requirement; and (iii) in the event that Rule 3-16 is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Equity Interests or other securities to constitute Security Collateral without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then such Equity Interests and other securities shall automatically be deemed to be Security Collateral, but only to the extent necessary to not be subject to any such financial statement requirement.

(p)   all contracts and agreements between any Grantor and one or more additional parties (including, without limitation, any Swap Contracts, licensing agreements and any partnership agreements, joint venture agreements, limited liability company agreements), the Related Contracts and the IP Agreements (as hereinafter defined), in each case as such agreements may be amended, amended and restated, supplemented or otherwise modified from time to time (collectively, the “ Assigned Agreements ”), including, without limitation, (i) all rights of such Grantor to receive moneys due and to become due under or pursuant to the Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to the Assigned Agreements, (iii) claims of such Grantor for damages arising out of or for breach of or default under the Assigned Agreements, to perform thereunder and to compel performance and otherwise exercise all remedies thereunder (all such Collateral being the “ Agreement Collateral ”);

(q)   the following (collectively, the “ Intellectual Property Collateral ”):

(i)   all patents, patent applications, utility models and statutory invention registrations, all inventions claimed or disclosed therein and all improvements thereto (“ Patents ”);

(ii)   all trademarks, service marks, domain names, trade dress, logos, designs, slogans, trade names, business names, corporate names and other source identifiers, whether registered or unregistered (provided that no security interest shall be granted in United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law), together, in each case, with the goodwill symbolized thereby (“ Trademarks ”);

(iii)   all copyrights, including, without limitation, copyrights in Computer Software (as hereinafter defined), internet web sites and the content thereof, whether registered or unregistered (“ Copyrights ”);

(iv)   all computer software, programs and databases (including, without limitation, source code, object code and all related applications and data files),

firmware and documentation and materials relating thereto, together with any and all maintenance rights, service rights, programming rights, hosting rights, test rights, improvement rights, renewal rights and indemnification rights and any substitutions, replacements, improvements, error corrections, updates and new versions of any of the foregoing (“ Computer Software ”);

(v)   all confidential and proprietary information of the Grantor, including, without limitation, know-how, trade secrets, manufacturing and production processes and techniques, inventions, research and development information, databases and data, including, without limitation, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information (collectively, “ Trade Secrets ”), and all other intellectual, industrial and intangible property of any type, including, without limitation, industrial designs and mask works;

(vi)   all registrations and applications for registration for any of the foregoing, including, without limitation, those registrations and applications for registration set forth in Schedule 13 to the Perfection Certificate, together with all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations thereof;

(vii)   all tangible embodiments of the foregoing, all rights in the foregoing provided by international treaties or conventions, all rights corresponding thereto throughout the world and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto;

(viii)   all agreements, permits, consents, orders and franchises relating to the license, development, use or disclosure of any of the foregoing to which such Grantor, now or hereafter, is a party or a beneficiary (“ IP Agreements ”); and

(ix)   any and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, violation, misuse or breach with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise recover, such damages (the property described in this Section 1(q) is referred to herein as the “ Intellectual Property ”);

(r)   all books and records (including, without limitation, customer lists, credit files, printouts and other computer output materials and records) of such Grantor pertaining to any of the Collateral;

(s)   and all other tangible and intangible personal property of whatever nature whether or not covered by Article 9 of the UCC;

(t)   all proceeds of, collateral for, income, royalties and other payments now or hereafter due and payable with respect to and Supporting Obligations relating to, any and all of the Collateral (including, without limitation, proceeds, collateral and supporting obligations that constitute property of the types described in clauses (a) through (t) of this Section 1) and, to the extent not otherwise included, all payments under insurance (whether or not the Noteholder

Collateral Agent is the loss payee thereof), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing Collateral;

provided that notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute a grant of a security interest in any Excluded Asset.

Section 2.   Security for Obligations .  This Agreement secures, in the case of each Grantor, the payment of all Obligations of such Grantor now or hereafter existing under the Note Documents, whether direct or indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest (including interest and fees that accrue after the commencement by or against any Grantor of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding), fees, premiums, penalties, indemnifications, contract causes of action, costs, expenses or otherwise (all such obligations being the “ Secured Obligations ”).

Section 3.   Grantors Remain Liable .  Anything herein to the contrary notwithstanding, (a) each Grantor shall remain liable under the contracts and agreements included in such Grantor’s Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Noteholder Collateral Agent of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral and (c) no Secured Party shall have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement or any other Note Document, nor shall any Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

Section 4.   Delivery and Control of Security Collateral .  (a) (i) All certificates representing or evidencing the Pledged Equity and (ii) all instruments representing or evidencing the Pledged Debt (excluding, unless an Event of Default has occurred and is continuing, Pledged Debt in an aggregate principal amount not in excess of $1,000,000), shall be delivered to and held by or on behalf of the Noteholder Collateral Agent pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Noteholder Collateral Agent.  During the continuation of an Event of Default, the Noteholder Collateral Agent shall have the right, at any time in its discretion and without notice to any Grantor, to (i) transfer to or to register in the name of the Noteholder Collateral Agent or any of its nominees any or all of the Security Collateral, subject only to the revocable rights specified in Section 11(a), (ii) exchange certificates or instruments representing or evidencing Security Collateral for certificates or instruments of smaller or larger denominations, and (iii) convert Security Collateral consisting of financial assets credited to any Securities Account to Security Collateral consisting of financial assets held directly by the Noteholder Collateral Agent, and to convert Security Collateral consisting of financial assets held directly by the Noteholder Collateral Agent to Security Collateral consisting of financial assets credited to any Securities Account.

(b)   Each Grantor acknowledges and agrees that (i) to the extent each interest in any limited liability company or limited partnership controlled now or in the future by such Grantor and pledged hereunder is a “security” within the meaning of Article 8 of the UCC and is governed by Article 8 of the UCC, such interest shall be certificated and (ii) each such interest shall at all times hereafter continue to be such a security and represented by such certificate.  Each Grantor further acknowledges and agrees that with respect to any interest in any limited liability company or limited partnership controlled now or in the future by such Grantor and pledged hereunder that is not a “security” within the meaning of Article 8 of the UCC, such Grantor shall at no time elect to treat any such interest as a “security” within the meaning of Article 8 of the UCC, nor shall such interest be represented by a certificate, unless such Grantor provides prior written notification to the Noteholder Collateral Agent of such election and such interest is thereafter represented by a certificate that is promptly delivered to the Noteholder Collateral Agent pursuant to the terms hereof.

(c)   With respect to any Security Collateral in which any Grantor has any right, title or interest and that constitutes an uncertificated security, such Grantor will promptly notify the Noteholder Collateral Agent thereof and, at the Noteholder Collateral Agent’s request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Noteholder Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Noteholder Collateral Agent as to such securities, without further consent of any Grantor or such nominee, or (ii) arrange for the Noteholder Collateral Agent to become the registered owner of the securities.  During the continuation of an Event of Default, with respect to any Security Collateral in which any Grantor has any right, title or interest, promptly upon the request of the Noteholder Collateral Agent, such Grantor will notify each such issuer of Security Collateral that such Security Collateral is subject to the security interest granted hereunder.

(d)   Except as otherwise set forth herein, if any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument, certificated security or Chattel Paper, such Instrument, certificated security or Chattel Paper shall be promptly delivered to the Noteholder Collateral Agent (unless delivered to the Bank Collateral Agent because the same constitutes Revolving Faciltiy First Lien Collateral), duly endorsed in a manner satisfactory to the Noteholder Collateral Agent, to be held as Collateral pursuant to this Agreement and, if applicable, the Intercreditor Agreement, provided that, unless an Event of Default has occurred and is continuing, the Grantors shall not be required to deliver the same pursuant to this clause (d) to the extent that the aggregate value of the Collateral not so delivered does not exceed $1,000,000.

Section 5.   Maintaining Electronic Chattel Paper, Transferable Records and Letter-of-Credit Rights and Giving Notice of Commercial Tort Claims .  Unless the Release Date shall have occurred:

(a)   Each Grantor will maintain Deposit Accounts (other than Excluded Accounts) only with a bank (which may include the Noteholder Collateral Agent) (a “ Pledged Account Bank ”) that has entered into a Deposit Account Control Agreement.  The Noteholder Collateral Agent hereby agrees that it will not deliver a notice indicating that the Noteholder Collateral Agent will take Control over a Deposit Account, Securities

Account or Commodity Account under any Control Agreement unless an Event of Default has occurred and is continuing.

(b)   The Noteholder Collateral Agent may, at any time and without notice to, or consent from, the Grantor, transfer, or direct the transfer of, funds from the Pledged Deposit Accounts to satisfy the Grantor’s obligations under the Note Documents if an Event of Default shall have occurred and be continuing.

(c)   Upon any termination by a Grantor of any Pledged Deposit Account, such Grantor will immediately (i) transfer all funds and property held in such terminated Pledged Deposit Account to another Pledged Deposit Account and (ii) notify all Account Debtors and any other obligors that were making payments to such Pledged Deposit Account to make all future payments to another Pledged Deposit Account, in each case so that the Noteholder Collateral Agent shall have a continuously perfected security interest in such Account Collateral, funds and property.

(d)   Upon the occurrence of and during the continuation of an Event of Default, promptly upon the request of the Noteholder Collateral Agent, each Grantor will maintain (i) all Electronic Chattel Paper with a value individually in excess of $500,000 or in the aggregate in excess of $2,000,000 so that the Noteholder Collateral Agent has control of the Electronic Chattel Paper in the manner specified in Section 9-105 of the UCC and (ii) all transferable records so that the Noteholder Collateral Agent has control of the transferable records in the manner specified in Section 16 of the Uniform Electronic Transactions Act, as in effect in the jurisdiction governing such transferable record (“ UETA ” ).

(e)   Each Grantor, by granting a security interest in its Receivables consisting of Letter-of-Credit Rights to the Noteholder Collateral Agent, intends to (and hereby does) assign to the Noteholder Collateral Agent its rights (including its contingent rights) to the proceeds of all Related Contracts consisting of letters of credit of which it is or hereafter becomes a beneficiary or assignee (except to the extent that the applicable Grantor is required by applicable law to apply such proceeds to a specified purpose).  If any Grantor is at any time a beneficiary under a letter of credit now or hereafter issued in favor of such Grantor, and (i) the face amount of such letter of credit is in excess of $1,000,000 individually or (ii) the face amount of such letter of credit, together with the face amount of all other letters of credit issued in favor of any Grantor in which the Noteholder Collateral Agent does not have a perfected security interest exceeds $2,500,000 in the aggregate, such Grantor shall promptly notify the Noteholder Collateral Agent thereof and such Grantor shall use commercially reasonable efforts to either (A) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Noteholder Collateral Agent of the proceeds of any drawing under such letter of credit or (B) arrange for the Noteholder Collateral Agent to become the transferee beneficiary of such letter of credit.

(f)   Upon the occurrence of an Event of Default, each Grantor shall, promptly upon request by the Noteholder Collateral Agent, (i) notify (and such Grantor hereby authorizes the Noteholder Collateral Agent to notify) the issuer and each nominated

person with respect to each of the Related Contracts consisting of letters of credit that the proceeds thereof have been assigned to the Noteholder Collateral Agent hereunder and any payments due or to become due in respect thereof are to be made directly to the Noteholder Collateral Agent or its designee and (ii) arrange for the Noteholder Collateral Agent to become the transferee beneficiary of letter of credit.

(g)   Each Grantor will give prompt notice in writing (which notice shall reference this Section 5(g) to the Noteholder Collateral Agent of any Commercial Tort Claim individually valued in excess of $500,000 that may arise in the future and, if requested by the Noteholder Collateral Agent, will promptly execute or otherwise authenticate a supplement to this Agreement, and otherwise take all necessary action, to subject such Commercial Tort Claim to the first priority security interest created under this Agreement.

Section 6.   Representations and Warranties .  Each Grantor represents and warrants as follows:

(a)   All Pledged Equity consisting of certificated securities and all Pledged Debt has been delivered to the Noteholder Collateral Agent in accordance herewith.  If such Grantor is an issuer of Security Collateral, such Grantor confirms that it has received notice of the security interest granted hereunder.

(b)   Such Grantor is the legal and beneficial owner of the Collateral granted or purported to be granted by such Grantor free and clear of any Lien, claim, option or right of others, except for the security interest created under this Agreement, subject to Liens permitted under Section 4.12 of the Indenture.  To the best knowledge of the Grantors, no effective financing statement or other instrument similar in effect covering all or any part of the Collateral or listing such Grantor or any trade name of such Grantor as debtor is on file in any recording office, except such as may have been filed in favor of the Noteholder Collateral Agent relating to the Note Documents or as otherwise permitted under the Indenture.

(c)   All of the Equipment and Inventory of such Grantor are located at the places specified therefor in Schedule 2 to the Perfection Certificate or at another location as to which such Grantor has complied with the requirements of Sections 8 and 9(b).  Such Grantor has obtained and maintains insurance with respect to its Equipment and Inventory incompliance with Section 8(d).

(d)   The Pledged Equity issued by Holdings, the Issuer or any of its Subsidiaries hereunder has been duly authorized and validly issued and is fully paid and non-assessable.  The Pledged Debt issued by Holdings, the Issuer or any of its Subsidiaries and pledged by such Grantor hereunder has been duly authorized, authenticated or issued and delivered and is the legal, valid and binding obligation of the issuers thereof, and such Pledged Debt is evidenced by one or more promissory notes (which promissory notes have been delivered to the Noteholder Collateral Agent) and the issuers thereof are not in default under such Pledged Debt.

(e)   As of the Issue Date, the Pledged Equity pledged by such Grantor constitutes the percentage of the issued and outstanding Equity Interests of the issuers thereof indicated on Schedule 7 to the Perfection Certificate.  As of the Issue Date, no Grantor has any Investment Property or Financial Assets other than the Investment Property and Financial Assets listed on Schedules 7, 8 and 9 to the Perfection Certificate.

(f)   Each Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a security interest hereunder and has full power and authority to grant to the Noteholder Collateral Agent the security interest in such Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person, other than any consent or approval that has been obtained and is in full force and effect or the need for which has been specifically disclosed herein or in the Indenture.

(g)   The Perfection Certificate has been duly prepared, completed and executed by Holdings and the Issuer and the information set forth therein, including the exact legal name of each Grantor, its jurisdiction of organization and its organizational number, is true, accurate and complete as of the Issue Date and as of each subsequent delivery required pursuant to Section 4.21 of the Indenture.

(h)   This Agreement creates in favor of the Noteholder Collateral Agent for the benefit of the Secured Parties a valid security interest in the Collateral granted by such Grantor, securing the payment of the Secured Obligations; and (i) when the financing statements set forth in Schedule 5 of the Perfection Certificate are filed or recorded with the appropriate Governmental Authority referred to therein with respect to the Collateral described therein in which a security interest may be perfected by filing or recordation and (ii) upon the taking of possession or control by the Senior Representative pursuant to Article III of the Intercreditor Agreement of the Collateral described in Schedules 7, 8 and 9 of the Perfection Certificate with respect to which a security interest may be perfected only by possession or control, all filings and other actions necessary to perfect the security interest in the Collateral granted by such Grantor have been duly made or taken and are in full force and effect; and such security interest is, in the case of Revolving Facility First Lien Collateral, second priority and, in the case of all Collateral other than Revolving Facility First Lien Collateral, first priority.

(i)   None of the Grantors has filed or consented to the filing of (i) any financing statement or analogous document under the UCC or any other applicable laws covering any Collateral, (ii) any assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with the United States Patent and Trademark Office, the United States Copyright Office or the Canadian Intellectual Property Office or (iii) any assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 4.12 of the Indenture.

(j)   The Inventory that has been produced or distributed by such Grantor has been produced in compliance with all requirements of applicable law, including, without limitation, the Fair Labor Standards Act.

(k)   No amount payable to such Grantor under or in connection with any Receivable is evidenced by any Instrument or Chattel Paper in excess of $500,000 which has not been delivered to the Noteholder Collateral Agent (or the Bank Collateral Agent) to the extent otherwise required to be delivered hereunder (other than purchase orders, supply agreements and invoices).

(l)   As to itself and its Intellectual Property Collateral:

(i)   To such Grantor’s knowledge, the operation of such Grantor’s business as currently conducted and the use of the Intellectual Property in connection therewith do not infringe, misappropriate or otherwise violate the intellectual property rights of any third party.

(ii)   Such Grantor is the exclusive owner of all right, title and interest in and to the material Intellectual Property Collateral owned by such Grantor and is entitled to use all material Intellectual Property Collateral subject only to the terms of the IP Agreements, in each case as used in or necessary to its operations.

(iii)   The IP Agreements, patents, trademarks, service marks, trade names and all applications for any of the foregoing included in the Intellectual Property Collateral are set forth on Schedule 13 to the Perfection Certificate and such Intellectual Property Collateral constitutes all Intellectual Property and all IP Agreements material to the operations of the Grantors.

(iv)   None of such Grantor's Intellectual Property material to the operations of the Grantors, has been abandoned or has been adjudged invalid or unenforceable in whole or part.

Section 7.   Further Assurances .  (a) Each Grantor agrees that from time to time, at the expense of such Grantor, such Grantor will promptly execute and deliver, or otherwise authenticate, all further instruments and documents, and take all further action that may be reasonably necessary or desirable, or that the Noteholder Collateral Agent may reasonably request, in order to perfect and protect any pledge or security interest granted or purported to be granted by such Grantor hereunder or to enable the Noteholder Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral of such Grantor.  Without limiting the generality of the foregoing, each Grantor will promptly with respect to Collateral of such Grantor:

(i)   mark conspicuously each document included in Inventory and, at the request of the Noteholder Collateral Agent if an Event of Default has occurred and is continuing, each Chattel Paper, each Related Contract and each Assigned Agreement and, at the request of the Noteholder Collateral Agent, each of its records pertaining to such Collateral with a legend, in form and substance reasonably satisfactory to the Noteholder Collateral Agent, indicating that such

document, Chattel Paper, Related Contract, Assigned Agreement or Collateral is subject to the security interest granted hereby

(ii)   execute or authenticate and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be reasonably necessary or desirable, or as the Noteholder Collateral Agent may reasonably request, in order to perfect and preserve the security interest granted or purported to be granted by such Grantor hereunder;

(iii)   execute and deliver to the Noteholder Collateral Agent an executed Control Agreement with respect to each Deposit Account of any Grantor owned, maintained or established by any Grantor after the Issue Date (other than an Excluded Account), including any such Deposit Account which at any time ceases to be an Excluded Account (it being understood that the Noteholder Collateral Agent shall not give any instructions directing the disposition of funds from time to time credited to any Deposit Account or withhold any withdrawal rights from such Grantor with respect to funds from time to time credited to any Deposit Account unless an Event of Default has occurred and is continuing);

(iv)   if any Grantor shall, following the Issue Date, establish and maintain any Securities Account or Commodity Account (other than an Excluded Account) with any Securities Intermediary or Commodity Intermediary, such Grantor shall, within 30 days (or such longer period as the Controlling Agent may agree in its sole discretion) of opening such Securities Account or Commodity Account, notify the Controlling Agent thereof and deliver to the Controlling Agent an executed Control Agreement with respect to such Securities Account or Commodity Account, as the case may be; and

(v)   deliver to the Noteholder Collateral Agent evidence that all other actions that the Noteholder Collateral Agent may deem reasonably necessary or desirable in order to perfect and protect the security interest granted or purported to be granted by such Grantor under this Agreement has been taken.

(b)   Each Grantor hereby authorizes the Noteholder Collateral Agent to file one or more financing or continuation statements, and amendments thereto, including, without limitation, one or more financing statements indicating that such financing statements cover all assets or all personal property (or words of similar effect) of such Grantor, in each case without the signature of such Grantor, and regardless of whether any particular asset described in such financing statements falls within the scope of the UCC or the granting clause of this Agreement.  A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.  Each Grantor ratifies its authorization for the Noteholder Collateral Agent to have filed such financing statements, continuation statements or amendments filed prior to the date hereof.

(c)   Each Grantor will furnish to the Noteholder Collateral Agent from time to time statements and schedules further identifying and describing the Collateral of such Grantor

and such other reports in connection with such Collateral as the Noteholder Collateral Agent may reasonably request, all in reasonable detail.

(d)   Each Grantor shall at all times defend its title to Collateral and the Noteholder Collateral Agent’s Liens therein against all Persons, claims and demands whatsoever, except for Liens permitted under Section 4.12 of the Indenture.

Section 8.   As to Equipment and Inventory and Insurance .  (a) Each Grantor will keep its Equipment and Inventory (other than Inventory sold in the ordinary course of business or pursuant to a disposition in accordance with Section 4.13 of the Indenture) at the places therefor specified in Section 2 to the Perfection Certificate or at such other locations as such Grantor may determine from time to time, provided that such Grantor shall give written notice to the Noteholder Collateral Agent specifying any such other location within 30 days after the first date on which any Equipment or Inventory is moved to such location.

(b)   Each Grantor will promptly furnish to the Noteholder Collateral Agent a statement respecting any loss or damage exceeding $1,000,000 to any of the Inventory of such Grantor.

(c)   In producing its Inventory, each Grantor will comply in all material respects with all requirements of applicable law, including, without limitation, the Fair Labor Standards Act.

(d)   Each Grantor will, at its own expense, maintain insurance with respect to its Equipment and Inventory in such amounts, against such risks, in such form and with such insurers, as required under Section 4.23 of the Indenture.  Without limitation to the foregoing, each Grantor shall maintain insurance with respect to the Collateral, covering casualty, hazard, public liability, theft, malicious mischief, flood and other risks, in amounts, with endorsements and with insurers (with a Best Rating of at least A7, unless otherwise approved by the Noteholder Collateral Agent) reasonably satisfactory to the Noteholder Collateral Agent.  All proceeds under each policy shall be payable to the Noteholder Collateral Agent or deposited directly to a Dominion Account.  From time to time upon request, the Grantors shall deliver to the Noteholder Collateral Agent the originals or certified copies of its insurance policies and updated flood plain searches.  Unless the Noteholder Collateral Agent shall agree otherwise, each policy of property insurance shall include satisfactory endorsements: (i) showing the Noteholder Collateral Agent as sole loss payee; (ii) requiring the insurer to endeavor to provid