COLLATERAL AGREEMENT dated as of May 20, 2008 among

COLLATERAL AGREEMENT, dated as of May 20, 2008 (this “ Agreement ”), made by NORTEK, INC., a Delaware corporation (the “ Issuer ”), the GUARANTORS listed on the signature pages hereof and the Additional Grantors (as hereinafter defined) (the Issuer, the Guarantors so listed and the Additional Grantors being, collectively, the “ Grantors ”), to U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent (in such capacity, together with any successor collateral agent, the “ Collateral Agent ”) for the Secured Parties.

(1)           The Issuer, the Guarantors named therein and U.S. Bank National Association, as trustee (in such capacity, the “ Trustee ”) and collateral agent, have entered into (a) an Indenture dated of even date herewith (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Indenture ”) and (b) a Purchase Agreement dated as of May 13, 2008 (the “ Purchase Agreement ”) among the Issuer, the Guarantors named therein and certain financial institutions (the “ Representatives ”) of the several 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 Collateral Agent for the ratable benefit of the Secured Parties a security interest in the Collateral (as hereinafter defined).

(3)           It is a condition precedent to the purchasing of the Notes 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 issuance and sale of the Notes pursuant to the Indenture.

(5)           Terms defined in the Indenture and not otherwise defined in this Agreement are used in this Agreement as defined in the Indenture.  Further, unless otherwise defined in this Agreement or in the Indenture, 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 ” 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 Collateral Agent sufficient to grant the Collateral Agent or, pursuant to Section 3.01 of the Intercreditor Agreement (as in effect on the Issue Date), the Collateral Agent (as defined in the Intercreditor Agreement) 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.

“ Deposit Account Control Agreement ” shall mean an agreement  in form reasonably satisfactory to the Collateral Agent (as advised by legal counsel, on which it may conclusively rely, or as directed by Majority Noteholders) sufficient to grant the Collateral Agent or, pursuant to Section 3.01 of the Intercreditor Agreement (as in effect on the Issue Date), the Collateral Agent (as defined in the Intercreditor Agreement) Control over a specified Deposit Account.

“ Dominion Account ” means any Deposit Account of a Grantor at Bank of America, N.A. or its Affiliates or branches or another bank acceptable to the Collateral 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 Collateral Agent in its sole discretion) after a Person becomes a Guarantor, the Deposit Accounts, Securities Accounts and Commodity Accounts of such Guarantor; and

(ii)           any Deposit Accounts, Securities Accounts and Commodity Accounts as to which (A) during the first 90 days dollowing the Closing Date, the aggregate book balances thereof, taken as a whole, do not exceed $10,000,000 and (B) thereafter, the aggregate collected balances thereof, taken as a whole, do not exceed $10,000,000 (or such greater amount as may be agreed from time to time by the Collateral Agent in its discretion).

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

(i)           shares of Voting Foreign Stock of any Foreign Subsidiary to the extent (and only to the extent) that the pledge thereof hereunder would result in more than 66% of the Voting Foreign Stock of such Foreign Subsidiary to be pledged hereunder; and

(ii)                      Equity Interests in Foreign Subsidiaries that are not Material Foreign Subsidiaries.

“Foreign Subsidiary” means any Subsidiary not incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia.

“ Intercompany Note ” means an intercompany note, substantially in the form of Exhibit E hereto, executed by the Issuer and each of its Subsidiaries and endorsed in blank by each of the Guarantors.

“ Lien Waiver ” means an agreement, in form and substance reasonably satisfactory to the Collateral 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 Collateral 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 Collateral Agent, and agrees to deliver the Collateral to the Collateral Agent upon request and (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges the Collateral Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and agrees to deliver the Collateral to the Collateral Agent upon request.

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

“Mortgages” means the mortgages, deeds of trust, leasehold mortgages, assignments of leases and rents, modifications and other security documents delivered pursuant to Section 4.26 of the Indenture.

“ Note Documents ” means the Indenture (including the Note Guarantees set forth therein), the Notes, this Agreement, the other 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 22.

“ Secured Parties ” means, collectively, (a) the Holders (as defined in the Indenture), (b) the Trustee, (c) the 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 Collateral Agent (as advised by legal counsel, on which it may conclusively rely, or as directed by Majority Noteholders) sufficient to grant the Collateral Agent or, pursuant to Section 3.01 of the Intercreditor Agreement (as in effect on the Issue Date), the Collateral Agent (as defined in the Intercreditor Agreement) Control with respect to a specified Securities Account.

“ UCC ” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“ Voting Foreign Stock ” shall mean shares of stock in any Foreign Subsidiary entitled to vote (within the meaning of Treasury Regulation Section 1.956-2(c)(2) promulgated under the Code).

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

(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 15 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 debt securities, 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 12 to the Perfection Certificate (all the foregoing, 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 11 to the Perfection Certificate, and the certificates, if any, representing such shares or units or other Equity Interests (all the foregoing, 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;

(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;

(iv)   all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (i), (ii) and (iii) above; and

(v)   all Proceeds of any of the foregoing;

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 3-10 or Rule 3-16 of Regulation S-X under the Securities Act ( “ Rule 3-10 ” and “ Rule 3-16 ,” respectively) (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the Commission (or any other governmental agency); (ii) in the event that either Rule 3-10 or Rule 3-16 requires or is amended, modified or interpreted by the Commission 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 Commission (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 either Rule 3-10 or Rule 3-16 is amended, modified or interpreted by the Commission 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 Commission (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 14 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 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;

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 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.

(a)   Each Grantor will maintain Deposit Accounts (other than Excluded Accounts) only with a bank (which may include the Collateral Agent) (a “ Pledged Account Bank ”) that has entered into a Deposit Account Control Agreement; provided that so long as the Collateral Agent (as defined in the Intercreditor Agreement) has possession or controls a deposit or securities account as gratuitous bailee for the Collateral Agent (as defined herein) pursuant to Section 3.01 of the Intercreditor Agreement (as in effect on the Issue Date) for purposes of perfecting the Collateral Agent’s Lien on such account, the Collateral Agent under this Agreement will not require a separate control agreement for such account.  The Collateral Agent hereby agrees that it will not deliver a notice indicating that the Collateral Agent will take Control over a Deposit Account, Securities Account or Commodity Account under any Control Agreement unless it has received notice or has knowledge that an Event of Default has occurred and is continuing.

(b)   The 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 it has received notice or has knowledge that 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 or 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 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 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 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 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 Collateral Agent, intends to (and hereby does) assign to the 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 Collateral Agent does not have a perfected security interest exceeds $2,500,000 in the aggregate, such Grantor shall promptly notify the 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 Collateral Agent of the proceeds of any drawing under such letter of credit or (B) arrange for the 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 Collateral Agent, (i) notify (and such Grantor hereby authorizes the 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 Collateral Agent hereunder and any payments due or to become due in respect thereof are to be made directly to the Collateral Agent or its designee and (ii) arrange for the Collateral Agent to become the transferee beneficiary of such letters of credit.

(g)   Each Grantor will give prompt notice in writing (which notice shall reference this Section 7(g)) to the Collateral Agent of any Commercial Tort Claim individually valued in excess of $2,500,000 that may arise in the future and, if requested by the 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.

(a)   All Pledged Equity consisting of certificated securities and all Pledged Debt has been delivered to the 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 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 10 and 11(b).  Such Grantor has obtained and maintains insurance with respect to its Equipment and Inventory in compliance with Section 10(d).

(d)   (i) The Pledged Equity issued by 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 pledged by such Grantor hereunder has been duly authorized, authenticated or issued and delivered, is the legal, valid and binding obligation of the issuers thereof, is evidenced by one or more promissory notes (which promissory notes have been delivered to the Collateral Agent and is not in default.

(ii) The Pledged Equity pledged by such Grantor constitutes the percentage of the issued and outstanding Equity Interests of the issuers thereof indicated on Schedule 11 to the Perfection Certificate.  No Grantor has any Investment Property or Financial Assets other than the Investment Property and Financial Assets listed on Schedules 11, 12 and 13 to the Perfection Certificate.

(e)   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 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.

(f)   The Perfection Certificate has been duly prepared, completed and executed by the Issuer and the information set forth therein, including the exact legal name of each Grantor, is true, accurate and complete.

(g)   This Agreement creates in favor of the 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 7 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 Collateral Agent of the Collateral described in Schedules 11, 12 and 16 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 Notes Collateral, first priority and, in the case of ABL Collateral, second priority.

(h)   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 or the United States Copyright 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.

(i)   No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the grant by such Grantor of the security interest granted hereunder or for the execution, delivery or performance of this Agreement by such Grantor, (ii) the perfection or maintenance of the security interest created hereunder (including the first or second, as applicable, priority nature of such security interest), except for the filing of financing and continuation statements under the UCC and the recordation of the Intellectual Property Collateral Agreement referred to in Section 12(f) with the U.S. Patent and Trademark Office and the U.S. Copyright Office, in each case as described in Schedule 7 to the Perfection Certificate, and the actions described in Section 4 with respect to the Security Collateral, or (iii) the exercise by the Collateral Agent of its voting or other rights provided for in this Agreement or the remedies in respect of the Collateral pursuant to this Agreement, except as may be required in connection with the disposition of any portion of the Security Collateral by laws affecting the offering and sale of securities generally.

(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 which has not been delivered to the 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, 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 is set forth on Schedule 14 to the Perfection Certificate and such schedule sets forth all such 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.

(i)   mark conspicuously at the request of the 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 Collateral Agent, each of its records pertaining to such Collateral with a legend, in form and substance satisfactory to the Collateral Agent, indicating that such document, Chattel Paper, Related Contract, Assigned Agreement or Collateral is subject to the security interest granted hereby;

(ii)   if any Grantor shall, following the Closing 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 Collateral Agent may agree in its sole discretion) of opening  such Securities Account or Commodity Account, notify the Collateral Agent thereof and deliver to the Collateral Agent an executed Control Agreement with respect to such Securities Account or Commodity Account, as the case may be; and

(iii)   deliver to the Collateral Agent evidence that all other action that the 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 (without herein imposing or implying any duty or obligation on the part of the Collateral Agent to require or request such evidence).

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