SECURITY AGREEMENT

EXHIBIT 10.6

EXECUTION VERSION

SECURITY AGREEMENT

Dated as of August 4, 2009

among

THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.,

THE SUBSIDIARIES FROM TIME TO TIME PARTY HERETO

and

Wilmington Trust Company,
as Collateral Agent

TABLE OF CONTENTS ^*

Table of Contents (cont.)

Schedules:

Exhibits:

      SECURITY AGREEMENT (this “ Agreement ”) dated as of August 4, 2009, among THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC. (the “ Company ” and a “ Grantor ”), a Maryland corporation, each of the undersigned Subsidiaries of the Company and each other Subsidiary of the Company which becomes a party hereto (each such Subsidiary individually a “ Grantor ” and collectively with the Company, the “ Grantors ”) and Wilmington Trust Company, as collateral agent (together with any successor or successors in such capacity, the “ Collateral Agent ”) for the benefit of the Trustee (as defined below) and the Holders (as defined below).

          Reference is made to the 11 ³ / ₈ % Senior Secured Notes due 2015 of the Company (as amended, restated, supplemented or modified from time to time, the “ Notes ”), in the original aggregate principal amount of $260,000,000 issued pursuant to the Indenture, dated as of August 4, 2009 (as amended, restated, amended and restated, modified or supplemented from time to time and including any agreement extending the maturity of, refinancing or otherwise amending, amending and restating or otherwise modifying or restructuring all or any portion of the obligations of the Company under the Notes or such agreement or any successor agreement, the “ Indenture ”) among the Company, the Grantors, the Collateral Agent and Wilmington Trust Company, as trustee (together with any successor or successors in such capacity, the “ Trustee ”). Each Grantor has, pursuant to the Indenture, unconditionally guaranteed the Obligations (as defined below).

          The Company and each other Grantor will materially benefit from the issuance of the Notes and it is a condition to the issuance of the Notes that the Grantors execute and deliver this Agreement.

          The Company and all direct and indirect domestic Subsidiaries of the Company that become a party thereto from time to time (such Subsidiaries being herein collectively referred to as the “ ABL Subsidiary Borrowers ”) are also parties to (i) an Amended and Restated Credit Agreement dated as of December 27, 2007 (as amended, modified, supplemented, extended, restated, renewed or replaced from time to time in accordance with the terms thereof including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and as the same may be amended, restated, modified, renewed, refunded, replaced or refinanced from time to time, regardless of whether such amendment, restatement, modification, renewal, refunding, replacement or refinancing is with the same financial institutions or otherwise, the “ ABL Credit Agreement ”) with the lenders from time to time party thereto (the “ ABL Lenders ”), Bank of America, N.A., a national banking association (“ Bank of America ”), as issuing bank for certain letters of credit (the “ ABL L/C Issuer ”), Bank of America, acting through its Retail Finance Group (“ BofA Retail Finance ”), as Administrative Agent for the ABL Lenders (together with its successor or successors in such capacity, the “ ABL Administrative Agent ”), BofA Retail Finance, as Collateral Agent (together with its successor or successors in such capacity, the “ ABL Collateral Agent ”), (ii) a Security Agreement dated as of December 3, 2007 (as amended, modified, supplemented, extended, restated, renewed or replaced from time to time in accordance with the terms thereof, the “ ABL Security Agreement ”), and (iii) a Pledge Agreement dated as of December 3, 2007 (as amended, modified, supplemented, extended, restated, renewed or replaced from time to time in accordance with the terms thereof, the “ ABL Pledge Agreement ”).

          Certain ABL Lenders and their Affiliates at the time acting as Hedging Providers may from time to time provide forward rate agreements, options, swaps, caps, floors and other hedging agreements (the “ ABL Hedging Agreements ”) to the ABL Obligors (as defined below). The ABL Lenders, the ABL L/C Issuer, the ABL Administrative Agent, each co-agent or sub-agent appointed by the ABL Administrative Agent from time to time pursuant to the ABL Credit Agreement, the ABL Collateral Agent, each co-agent or sub-agent appointed by the ABL Collateral Agent from time to time pursuant to the ABL Security Agreement and each Indemnitee (as defined in the ABL Credit Agreement)

and their respective successors and assigns are herein referred to individually as an “ ABL Credit Party ” and collectively as the “ ABL Credit Parties ” and the ABL Credit Parties, the Hedging Providers and their respective successors and assigns are herein referred to individually as an “ ABL Secured Party ” and collectively as the “ ABL Secured Parties ”.

          To induce the ABL Lenders to enter into the ABL Credit Agreement and the other Loan Documents (as defined in the ABL Credit Agreement) and the Hedging Providers to enter into the ABL Hedging Agreements contemplated by the ABL Credit Agreement (such Loan Documents and the ABL Hedging Agreements being herein collectively referred to as the “ ABL Loan Documents ”), and as a condition precedent to the obligations of the ABL Lenders under the ABL Credit Agreement, certain Subsidiaries of the Company who are not ABL Subsidiary Borrowers (each an “ ABL Subsidiary Guarantor ” and, collectively, the “ ABL Subsidiary Guarantors ”) have agreed, jointly and severally, to provide a guaranty of all obligations of the Company and the ABL Subsidiary Borrowers under or in respect of the ABL Loan Documents. The Company, the ABL Subsidiary Borrowers and ABL Subsidiary Guarantors are herein collectively referred to as the “ ABL Obligors ” and individually as an “ ABL Obligor ”.

          Revolving loans and term loans (collectively, “ ABL Loans ”) are now and may hereafter be outstanding under the ABL Credit Agreement. The payment of the principal of and interest on the ABL Loans and all other Obligations (as defined in the ABL Credit Agreement and the ABL Security Agreement, the “ ABL Loan Obligations ” and, together with all ABL Hedging Obligations (as defined below), the “ ABL Obligations ”) are secured pursuant to the ABL Security Agreement and various other security documents by a first priority security interest in all of the ABL Obligors’ right, title and interest in all of their present and future personal and real property and proceeds thereof (other than Excluded Assets as described in the ABL Loan Documents) (all such non-excluded personal and real property and proceeds thereof being herein collectively referred to as the “ ABL Collateral ”).

          The Indenture requires the Grantors to secure their obligations under the Notes and the Indenture by a second priority security interest in the assets constituting or intended to constitute ABL Collateral, subject to exceptions (the “ Note Collateral ”).

          The ABL Collateral Agent and the Collateral Agent will enter into an Intercreditor Agreement dated as of the date hereof (as amended, restated, supplemented or modified from time to time, the “ Intercreditor Agreement ”) to provide among other things that:

               (i) the ABL Loan Obligations, plus obligations on account of Cash Management Services (as defined in the Intercreditor Agreement), ABL Hedging Obligations and obligations on account of other Bank Products (as defined in the Intercreditor Agreement) are secured on a first priority basis by all ABL Collateral up to the Maximum Revolving Debt Amount (as defined in the Intercreditor Agreement);

               (ii) the Obligations are secured by the Note Collateral (which includes some, but not all, of the assets constituting or intended to constitute ABL Collateral);

               (iii) the security interest securing the Obligations in the ABL Collateral (x) is of a second priority subject only to the first priority security interest securing an amount of ABL Obligations that does not exceed the Maximum Revolving Debt Amount and (y) is of a first priority with respect to that portion of the ABL Obligations which exceeds the Maximum Revolving Debt Amount.

          Accordingly, the Grantors and the Collateral Agent, on behalf of itself and each Secured Party (and each of their respective successors or assigns), hereby agree as follows:

ARTICLE I
DEFINITIONS

           Section 1.01 Definition of Terms Used Herein . Unless the context otherwise requires, all capitalized terms used but not defined herein shall have the meanings set forth in the Indenture, all references to the Uniform Commercial Code or “ UCC ” shall mean the Uniform Commercial Code in effect in the State of New York as of the date hereof and any uncapitalized terms used herein which are defined in the UCC have the respective meanings provided in the UCC; provided , however , that if a term is defined in Article 9 of the Uniform Commercial Code differently than in another Article thereof, the term shall have the meaning set forth in Article 9, and provided further that if by reason of mandatory provisions of law, perfection, or the effect of perfection or non-perfection, of the Security Interest in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy, as the case may be.

           Section 1.02 Definition of Certain Terms Used Herein . As used herein, the following terms shall have the following meanings:

          “ ABL Cash Management Requirements ” shall have the meaning given that term in Section 4.16(e ) of this Agreement.

          “ ABL Hedging Obligations ” shall mean all Hedging Obligations (as defined in the Indenture) of the Company or any of its Subsidiaries or Cash Management Obligations (as defined in the Indenture) of the Company or any of its Subsidiaries in each case owing to an ABL Lender or an Affiliate of an ABL Lender at the time of entry into such Hedging Obligations or Cash Management Obligations.

          “ Accession Agreement ” shall mean an Accession Agreement, substantially in the form of Exhibit A hereto, executed and delivered by an additional Grantor after the Issue Date pursuant to Section 4.17 of the Indenture and/or Section 4.17 of this Agreement.

          “ Accessions ” shall have the meaning given that term in the UCC.

          “ Account Debtor ” shall mean any person who is or who may become obligated to any Grantor under, with respect to or on account of a Receivable.

          “ Accounts ” shall mean “accounts” as defined in the UCC, and all right, title and interest of any Grantor to payment for goods and services sold or leased, including any such right evidenced by Chattel Paper, whether due or to become due, whether or not it has been earned by performance, and whether now or hereafter acquired or arising in the future, including, without limitation, (i) accounts receivable from Affiliates of the Grantors, (ii) health-care insurance receivables (as defined in the UCC), and (iii) rights to payment arising out of the use of a credit or charge card or information contained on or used with that card.

          “ Accounts Receivable ” shall mean all Accounts and all right, title and interest in any returned goods, together with all rights, titles, securities and guarantees with respect thereto, including any rights to stoppage in transit, replevin, reclamation and resales, and all related security interests, liens and pledges, whether voluntary or involuntary, in each case whether now existing or owned or hereafter arising or acquired.

          “ Agent’s Account ” shall (i) have the meaning set forth in Section 5.14(f) of the ABL Credit Agreement; or (ii) if the ABL Obligations are no longer outstanding, mean an account of the Collateral Agent to be notified to the Company by the Collateral Agent.

          “ Bankruptcy Code ” means the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq ., as amended from time to time.

          “ Blocked Account Agreement ” means with respect to a Blocked Account, an agreement, in form and substance satisfactory to the Collateral Agent, establishing Control of such Blocked Account by the Collateral Agent and whereby the Blocked Account Bank maintaining such Blocked Account agrees, upon notification by the Collateral Agent (or any agent or bailee thereof) of the occurrence and during the continuance of an Event of Default, to comply only with the instructions originated by the Collateral Agent (or the ABL Collateral Agent acting as agent and bailee on behalf of the Collateral Agent and the other Secured Parties) without the further consent of any Grantor.

          “ Blocked Account Bank ” shall have the meaning given that term in Section 5.01(a ) of this Agreement.

          “ Blocked Accounts ” shall have the meaning given that term in Section 4.16(e ) of this Agreement.

          “ Blue Sky Laws ” shall have the meaning given that term in Section 6.01(c ) of this Agreement.

          “ Books and Records ” means all instruments, files, records, ledger sheets and documents covering or relating to any of the Collateral.

          “ Chattel Paper ” shall have the meaning given that term in the UCC.

          “ Claims ” means all “commercial tort claims” (as defined in the UCC), including, without limitation, each of the claims described on Schedule V hereto, as such Schedule may be amended, modified or supplemented from time to time, and also means and includes all claims, causes of action and similar rights and interests (however characterized) of a Grantor, whether arising in contract, tort or otherwise, and whether or not subject to any action, suit, investigation or legal, equitable, arbitration or administrative proceedings.

          “ Collateral ” shall mean all personal property of each Grantor, including, without limitation, all:

               (i) Accounts Receivable,

               (ii) Chattel Paper,

               (iii) Claims, Judgments and/or Settlements,

               (iv) Deposit Accounts and securities accounts and all cash and cash equivalents or other assets in each such account,

               (v) Documents,

               (vi) Equipment,

               (vii) Fixtures,

               (viii) General Intangibles (including Payment Intangibles and Intellectual Property),

               (ix) Goods,

               (x) Instruments,

               (xi) Inventory,

               (xii) Investment Property,

               (xiii) Letter-of-Credit Rights,

               (xiv) Software,

               (xv) Supporting Obligations,

               (xvi) money, policies and certificates of insurance, deposits, cash, or other property,

               (xvii) all Books and Records and information relating to any of the foregoing ((i) through (xvi)) and/or to the operation of any Grantor’s business, and all rights of access to such Books and Records and information, and all property in which such Books and Records and information are stored, recorded and maintained,

               (xviii) all insurance proceeds, refunds, and premium rebates, including, without limitation, proceeds of fire and credit insurance, whether any of such proceeds, refunds, and premium rebates arise out of any of the foregoing ((i) through (xvii)) or otherwise,

               (xix) all liens, guaranties, rights, remedies, and privileges pertaining to any of the foregoing ((i) through (xviii)), including the right of stoppage in transit, and

               (xx) any of the foregoing, whether now owned or now due, or in which any Grantor has an interest, or hereafter acquired, arising, or to become due, or in which any Grantor obtains an interest, and all products, Proceeds, substitutions, and Accessions of or to any of the foregoing;

provided , however , that Collateral shall not include Excluded Assets; provided that the Proceeds from any sale, transfer or assignment or other voluntary or involuntary disposition of such Excluded Assets, shall not be excluded from the definition of Collateral to the extent that the assignment of such Proceeds is not prohibited or to the extent not otherwise required to be paid to the holder of the Indebtedness secured by such Excluded Assets; and provided , further , that the term “Collateral” as used in this Agreement shall not include any “Collateral” as defined in the Pledge Agreement.

          “ Commodity Account ” shall have the meaning given that term in the UCC.

          “ Commodity Intermediary ” shall have the meaning given that term in the UCC.

          “ Computer Hardware ” means all computer and other electronic data processing hardware of a Grantor, whether now or hereafter owned, licensed or leased by such Grantor, including, without

limitation, all integrated computer systems, networks, central processing units, memory units, display terminals, printers, features, computer elements, card readers, tape drives, hard and soft disk drives, storage devices, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related hardware, all documentation, flowcharts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes associated with any of the foregoing and all options, warranties, services contracts, program services, test rights, maintenance rights, support rights, renewal rights and indemnifications relating to any of the foregoing.

          “ Control ”, with respect to (i) Deposit Accounts, shall have the meaning given that term in Section 9-104 of the UCC; (ii) Electronic Chattel Paper, shall have the meaning given that term in Section 9-105 of the UCC; (iii) Investment Property, shall have the meaning given the term in Section 9-106 of the UCC; and (iv) Letter-of-Credit Rights, shall have the meaning given that term in Section 9-107 of the UCC.

          “ Copyright License ” shall mean any written agreement, now or hereafter in effect, granting any right to any third party, whether exclusive or non-exclusive, under any Copyright now or hereafter owned by any Grantor, whether or not registered, or which such Grantor otherwise has the right to license, or granting any right, whether exclusive or non-exclusive, to such Grantor under any Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement.

          “ Copyrights ” shall mean all of the following now owned or hereafter acquired by any Grantor:

               (i) all copyright rights in any work subject to the copyright laws of the United States or any other country (whether or not the underlying works of authorship have been published), whether as author, assignee, transferee or otherwise, and

               (ii) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office, including those listed on Schedule I and any renewals and extensions thereof,

               (iii) all Software, computer programs, web pages, computer data bases and computer program flow diagrams, including all source codes and object codes related to any or all of the foregoing,

               (iv) all tangible property embodying or incorporating any or all of the foregoing, whether in completed form or in some lesser state of completion, and all masters, duplicates, drafts, versions, variations and copies thereof, in all formats,

               (v) all claims for, and rights to sue for, past, present and future infringement of any of the foregoing,

               (vi) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including, without limitation, damages and payments for past, present or future infringements thereof and payments and damages under all Copyright Licenses in connection therewith,

               (vii) all rights in any of the foregoing, arising under the Laws of the United States, to copy, record, synchronize, broadcast, transmit, perform, distribute, create derivative

works of, and/or display any of the foregoing or any matter which is the subject of any of the foregoing in any manner and by any process now known or hereafter devised, and

               (viii) the name and title of each Copyright item and all rights of any Grantor to the use thereof, including, without limitation, rights protected pursuant to trademark, service mark, unfair competition, anti-cybersquatting and/or the rules and principles of any other applicable statute, common law or other rule or principle of law now existing or hereafter arising.

          “ Daily Receipts ” shall mean all amounts received by the Company and the other Grantors, whether in the form of cash, checks, any moneys received or receivable in respect of charges made by means of credit cards, and other negotiable instruments, in each case as a result of the sale of Inventory.

          “ Debtor Relief Laws ” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

          “ De Minimis Deposit Account ” shall have the meaning given that term in Section 4.16(e ) of this Agreement.

          “ De Minimis Deposit Amount ” shall have the meaning given that term in Section 4.16(e ) of this Agreement.

          “ Deposit Account ” shall have the meaning given that term in the UCC and shall also include all demand, time, savings, passbook, or similar accounts maintained with a bank or other financial institution, whether or not evidenced by an Instrument, all cash and other funds held therein and all passbooks related thereto and all certificates and Instruments, if any, from time to time representing, evidencing or deposited into such deposit accounts.

          “ Deposit Account Control Agreement ” or “ DACA ” shall mean with respect to a Deposit Account, an agreement by and among the bank at which such Deposit Account is maintained, the Grantor that is the bank’s customer with respect to such Deposit Account, and the Collateral Agent (and which may but is not required to include the ABL Collateral Agent as a party), in form and substance satisfactory to the Collateral Agent and in compliance with the terms of the Intercreditor Agreement, establishing Control of such Deposit Account by the Collateral Agent and whereby the bank maintaining such Deposit Account agrees, upon notification by the Collateral Agent of the occurrence and during the continuance of an Event of Default, to comply only with the instructions originated by the Collateral Agent (or the ABL Collateral Agent if the ABL Collateral Agent is a party to such agreement), without the further consent of any Grantor. A DACA may (but is not required to) take the form of an amended (or amended and restated) Blocked Account Agreement.

          “ Documents ” shall have the meaning given that term in the UCC.

          “ Electronic Chattel Paper ” shall have the meaning given that term in the UCC.

          “ Equipment ” shall mean “equipment”, as defined in the UCC, and shall also mean all Computer Hardware, furniture, store fixtures, motor vehicles, rolling stock, machinery, office equipment, plant equipment, tools, dies, molds, and other goods, property, and assets which are used and/or were purchased for use in the operation or furtherance of a Grantor’s business, and any and all Accessions or additions thereto, and substitutions therefor.

          “ Excluded Assets ” means (i) any permit, lease, license, contract, agreement, joint venture agreement, or other instrument to which the Company or any Grantor is a party and any Equity Interests in a joint venture to the extent the Company or such Grantor is prohibited from granting a Lien in its rights thereunder pursuant to the terms of such permit, lease, license, contract, agreement, or other instrument, or the shareholder or other similar agreement governing such joint venture, or under applicable law (other than to the extent that any restriction on such assignment would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable Law or principles of equity); (ii) any Excluded Equipment; (iii) any United States intent-to-use trademark application to the extent and for so long as creation by a Grantor of a Security Interest therein would impair the validity or enforceability of such intent-to-use trademark applications as determined by the Company; (iv) any assets or Equity Interests acquired by the Company or any Grantor after the date hereof in a transaction not prohibited by the Indenture to the extent such assets or Equity Interests are subject to a Lien permitted by clauses (v) or (vi) of the definition of “Permitted Liens” in the Indenture so long as the documents applicable to such Lien prohibit any other Lien on such assets or Equity Interests; (v) each Principal Property (as defined in the Indenture), except as otherwise provided under Section 4.10 of the Indenture; (vi) any property or assets to the extent such property or assets does not constitute ABL Collateral; provided , however , that this clause (vi) shall be applicable only at such time or times as the ABL Credit Agreement is in effect; (vii) any voting Equity Interests of a Foreign Subsidiary in excess of 65% of all outstanding voting Equity Interests of a first-tier Foreign Subsidiary; and (viii) any property or assets owned by any Foreign Subsidiary.

          “ Excluded Equipment ” means at any date any assets of the Company or any Grantor which are subject to a Lien securing Indebtedness permitted by clause (iv) of Section 4.08(b) of the Indenture if and to the extent that (i) the express terms of a valid and enforceable restriction in favor of a Person who is not the Company or a Grantor contained in the agreements or documents granting or governing such Indebtedness prohibits, or requires any consent or establishes any other conditions for, an assignment thereof, or a grant of a security interest therein, by the Company or the applicable Grantor and (ii) such restriction relates only to the asset or assets acquired by the Company or the applicable Grantor with the proceeds of such Indebtedness and attachments thereto or substitutions therefor.

          “ Financial Officer ” of any Person means the chief financial officer, principal accounting officer, treasurer, controller or any vice precident-finance, vice-president-financal services or vice president-treasury services of such Person.

          “ Financing Statement ” shall have the meaning given that term in the UCC.

          “ Fixtures ” shall have the meaning given that term in the UCC.

          “ General Intangibles ” shall mean “general intangibles” as defined in the UCC, and all choses in action and causes of action and all other assignable intangible personal property of any Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including all Payment Intangibles, all rights and interests in partnerships, limited partnerships, limited liability companies and other unincorporated entities which interests do not constitutes Securities, corporate or other business records, indemnification claims, contract rights (including rights under personal property leases, whether entered into as lessor or lessee, hedging agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the Receivables.

          “ Goods ” shall have the meaning given that term in the UCC.

          “ Governmental Authority ” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central bank).

          “ Holders ” means the holders from time to time of the Notes.

          “ Indemnitee ” shall have the meaning given that term in Section 7.06(b ) of this Agreement.

          “ Indenture ” shall have the meaning given to that term in the preliminary statement of this Agreement.

          “ Intellectual Property ” shall mean all intellectual and similar property of any Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, technology, confidential or proprietary technical and business information, know-how, show-how, data or information, domain names, mask works, customer lists, vendor lists, subscription lists, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing.

          “ Instruments ” shall have the meaning given that term in the UCC.

          “ Inventory ” shall mean “inventory” as defined in the UCC, and all goods of any Grantor, whether now owned or hereafter acquired, held for sale or lease, or furnished or to be furnished by any Grantor under contracts of service, or consumed in any Grantor’s business, including raw materials, intermediates, work in process, packaging materials, finished goods, semi-finished inventory, scrap inventory, manufacturing supplies and spare parts, and all such goods that have been returned to or repossessed by or on behalf of any Grantor.

          “ Investment Property ” shall have the meaning given that term in the UCC.

          “ Judgments ” shall mean all judgments, decrees, verdicts, decisions or orders issued in resolution of or otherwise in connection with a Claim, whether or not final or subject to appeal, and including all rights of enforcement relating thereto and any and all Proceeds thereof.

          “ Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directives, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

          “ Leaseholds ” means with respect to any Person all of the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.

          “ Letter-of-Credit Right ” shall have the meaning given that term in the UCC and shall also mean any right to payment or performance under a letter of credit, whether or not the beneficiary has demanded, or is at the time entitled to demand, payment or performance.

          “ Letters of Credit ” shall have the meaning given that term in the UCC.

          “ License ” shall mean any Patent License, Trademark License, Copyright License, software license or other license or sublicense to which any Grantor is a party, which license or sublicense is, or would reasonably be expected to be, material to the business, condition (financial or otherwise) or operations of the Company and its Subsidiaries taken as a whole, including those listed on Schedule II .

          “ Note Documents ” means the Indenture, the Notes, any registration rights agreement related thereto and the Collateral Documents, in each case including all exhibits and schedules thereto, and all other agreements, documents and instruments relating to the Notes, in each case as the same may be amended, modified or supplemented from time to time in accordance with the provisions thereof.

          “ Obligations means, without duplication:

               (i) all principal of and interest (including, without limitation, any interest which accrues after the commencement of any proceeding under any Debtor Relief Law with respect to any Grantor, whether or not allowed or allowable as a claim in any such proceeding) on the Notes;

               (ii) all fees, expenses, indemnification obligations and other amounts of whatever nature now or hereafter payable by any Grantor (including, without limitation, any amounts which accrue after the commencement of any proceeding under any Debtor Relief Law with respect to any Grantor, whether or not allowed or allowable as a claim in any such proceeding) pursuant to the Indenture, the Notes, the Intercreditor Agreement, any Collateral Document or any other Note Document;

               (iii) all expenses of the Collateral Agent or the Trustee as to which the Collateral Agent or the Trustee has a right to reimbursement under the Indenture or under any other similar provision of any Collateral Document, the Intercreditor Agreement, or any other Note Document including, without limitation, any and all sums advanced by the Collateral Agent to preserve the Collateral or its security interest in the Collateral; and

               (iv) all other obligations or liabilities now existing or hereafter arising or incurred (including, without limitation, any amounts which accrue after the commencement of any Debtor Relief Law with respect to any Grantor, whether or not allowed or allowable as a claim in any such proceeding) on the part of any Grantor pursuant to the Indenture, the Notes, the Intercreditor Agreement, any Collateral Document or any other Note Document;

together in each case with all renewals, modifications, refinancings, consolidations or extensions thereof.

          “ Patent License ” shall mean any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a Patent, now or hereafter owned by any Grantor or which any Grantor otherwise has the right to license, is in existence, or granting to any Grantor any right to make, use or sell any invention on which a Patent, now or hereafter owned by any third party, is in existence, and all rights of any Grantor under any such agreement.

          “ Patents ” shall mean all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States, all registrations and recordings thereof, and all applications for letters patent of the United States, including registrations, recordings and pending applications in the United States Patent and Trademark Office, including those listed on Schedule III , and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the

inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.

          “ Payment Intangible ” shall have the meaning given that term in the UCC and shall also mean any General Intangible under which the Account Debtor’s primary obligation is a monetary obligation.

          “ Perfection Certificate ” shall mean a certificate substantially in the form of Exhibit B hereto, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by a Financial Officer and the chief legal officer of the Company.

          “ Pledge Agreement ” shall mean the Pledge Agreement, dated as of the date hereof (as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time), among the Company, the grantors party thereto and the Collateral Agent.

          “ Proceeds ” shall mean “proceeds” as defined in the UCC, and any consideration received from the sale, exchange, license, lease or other disposition of any asset or property that constitutes Collateral, any value received as a consequence of the possession of any Collateral and any payment received from any insurer or other person or entity as a result of the destruction, loss, theft, damage or other involuntary conversion of whatever nature of any asset or property which constitutes Collateral, and shall include

               (i) all cash and negotiable instruments received by or held on behalf of the Collateral Agent pursuant to the provisions of the Indenture, this Agreement or otherwise, in respect of any Collateral,

               (ii) in the case of Collateral constituting Intellectual Property, any claim of any Grantor against any third party for (and the right to sue and recover for and the rights to damages or profits due or accrued arising out of or in connection with)

               (A) past, present or future infringement of any Patent now or hereafter owned by any Grantor, or licensed under a Patent License,

               (B) past, present or future infringement or dilution of, or any unfair competition with, any Trademark now or hereafter owned by any Grantor or licensed under a Trademark License or injury to the goodwill associated with or symbolized by any Trademark now or hereafter owned by any Grantor,

               (C) past, present or future breach of any License and

               (D) past, present or future infringement of any Copyright now or hereafter owned by any Grantor or licensed under a Copyright License and

               (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

          “ Real Property ” means, with respect to any Person, all of the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds.

          “ Receivables ” shall mean all Accounts, all Payment Intangibles, all Instruments, all Chattel Paper and all Letter-of-Credit Rights.

          “ Secured Parties ” shall mean

               (i) the Collateral Agent and any co-agents or sub-agents;

               (ii) the Trustee and any co-agents or sub-agents;

               (iii) the Holders;

               (iv) the beneficiaries of each indemnification obligation undertaken by any Grantor under any Note Document, and

               (v) the successors and assigns of each of the foregoing.

          “ Securities Act ” shall have the meaning given that term in Section 6.01(c) of this Agreement.

          “ Securities Account ” shall have the meaning given that term in the UCC.

          “ Securities Intermediary ” shall have the meaning given that term in the UCC.

          “ Security ” shall have the meaning given that term in the UCC.

          “ Security Interest ” shall have the meaning given that term in Section 2.01 .

          “ Settlements ” shall mean all right, title and interest of a Grantor in, to and under any settlement agreement or other agreement executed in settlement or compromise of any Claim, including all rights to enforce such agreements and all payments thereunder or arising in connection therewith.

          “ Software ” shall have the meaning given that term in the UCC.

          “ Supporting Obligation ” shall have the meaning given that term in the UCC and shall also refer to a Letter-of-Credit Right or secondary obligation that supports the payment or performance of an Account, Chattel Paper, a Document, a General Intangible, an Instrument, or Investment Property.

          “ Trademark License ” shall mean any written agreement, now or hereafter in effect, granting to any third party any right to use any Trademark now or hereafter owned by any Grantor or which any Grantor otherwise has the right to license, or granting to any Grantor any right to use any Trademark now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.

          “ Trademarks ” shall mean all of the following now owned or hereafter arising, used, acquired or owned by any Grantor:

               (i) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, certification marks, collective marks, brand names, trademark rights arising out of domain names, and other identifiers of source or goodwill, along with all prints and labels on which any of the foregoing have appeared or appear, package and other designs, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof; and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office, any State of the

United States, or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule IV ,

               (ii) all goodwill associated therewith or symbolized thereby

               (iii) all claims for, and rights to sue for, past, present or future infringements, dilution, or unfair competition with any of the foregoing,

               (iv) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including, without limitation, damages and payments for past, present or future infringements, dilution or unfair competition with any of the foregoing and payments and damages under all Trademark Licenses in connection therewith and

               (v) all other assets, rights and interests that uniquely reflect or embody such goodwill.

           Section 1.03 Rules of Interpretation . The rules of interpretation specified in Section 1.03 of the Indenture shall be applicable to this Agreement.

ARTICLE II
SECURITY INTEREST

           Section 2.01 Security Interest . As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby pledges to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest in, all of such Grantor’s right, title and interest in, to and under the Collateral (the “ Security Interest ”). Without limiting the foregoing, each Grantor hereby designates the Collateral Agent as such Grantor’s true and lawful attorney, exercisable by the Collateral Agent or its nominee or custodian whether or not an Event of Default exists, with full power of substitution, at the Collateral Agent’s option, to file one or more Financing Statements, continuation statements, filings with the United States Patent and Trademark Office or United States Copyright Office (or any successor office) or other documents as it determines reasonably necessary for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of any Grantor (each Grantor hereby appointing the Collateral Agent as such Person’s attorney to sign such Person’s name to any such instrument or document, whether or not an Event of Default exists), and naming any Grantor or the Grantors as debtors and the Collateral Agent as secured party. Any such Financing Statement may indicate the Collateral as “all assets of the Grantor”, “all personal property of the debtor” 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.

           Section 2.02 No Assumption of Liability . The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Collateral.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

          The Grantors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties that:

           Section 3.01 Title and Authority . 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 which has been obtained except where the failure to obtain such consent or approval, individually or in the aggregate, could not reasonably be expected to result in a material adverse effect on the ability of any Grantor to perform any of its obligations under the Note Documents, the rights of or benefits available to the Collateral Agent and the Secured Parties under any Note Document or the Collateral as a whole.

           Section 3.02 Filings . (a) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein is correct and complete in all material respects. Uniform Commercial Code financing statements or other appropriate filings, recordings or registrations containing a description of the Collateral have been delivered to the Collateral Agent or its nominee or custodian for filing in each central-filing office specified in Schedule 6 to the Perfection Certificate, which are all the filings, recordings and registrations (other than filings required to be made in the United States Patent and Trademark Office and the United States Copyright Office in order to perfect the security interest in Collateral consisting of United States Patents, Trademarks and Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent or its nominee or custodian (for the ratable benefit of the Secured Parties) in respect of all Collateral in which the security interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or re-registration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements.

          (b) Fully executed security agreements in the forms of Exhibits C or D hereto (as applicable) and containing a description of all Collateral consisting of Intellectual Property registered with the United States Patent and Trademark Office or the United States Copyright Office, as applicable, have been delivered to the Collateral Agent or its nominee or custodian for recording by the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, and otherwise as may be reasonably required pursuant to the laws of any other reasonably necessary jurisdiction, to protect the validity of and to establish a legal, valid and perfected Security Interest in favor of the Collateral Agent or its nominee or custodian (for its own benefit and the benefit of the other Secured Parties) in respect of all Collateral consisting of Patents, Trademarks and Copyrights in which a security interest may be perfected by filing, recording or registration in the United States Patent and Trademark Office or United States Copyright Office, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary (other than such actions as are necessary to perfect the Security Interest with respect to any Collateral consisting of Patents, Trademarks and Copyrights (or registration or application for registration thereof) acquired or developed after the date hereof).

           Section 3.03 Validity of Security Interest . The Security Interest constitutes:

          (a) a legal and valid Lien (prior and superior in right and interest to any other Person other than with respect to Permitted Liens) in all the Collateral securing the payment and performance of the Obligations;

          (b) subject to the filings described in Section 3.02 above, a perfected Lien (prior and superior in right and interest to any other Person other than with respect to Permitted Liens) in all Collateral in which a security interest may be perfected by filing, recording or registering a financing

statement or analogous document in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the Uniform Commercial Code or other applicable Law in such jurisdictions;

          (c) with respect to:

               (i) Blocked Accounts or Deposit Accounts, upon delivery of a Blocked Account Agreement with respect to a Blocked Account or a DACA with respect to a Deposit Account, a perfected Lien (prior and superior in right and interest to any other Person other than with respect to Permitted Liens) in such Blocked Account or Deposit Account, as applicable;

               (ii) Electronic Chattel Paper, upon compliance by the relevant Grantor with Section 4.16 hereof, a perfected Lien (prior and superior in right and interest to any other Person other than with respect to Permitted Liens) in all Electronic Chattel Paper;

               (iii) Investment Property, a perfected Lien (prior and superior in right and interest to any other Person other than with respect to Permitted Liens) in all Investment Property to the extent that perfection can be accomplished by compliance with the terms of Section 9-106 of the UCC; and

               (iv) Letter-of-Credit Rights, upon delivery of a control agreement as provided in Section 4.16(d) hereof, a perfected Lien (prior and superior in right and interest to any other Person other than with respect to Permitted Liens) in all Letter-of-Credit Rights; and

          (d) a perfected Lien (prior and superior in right and interest to any other Person other than with respect to Permitted Liens) in all Collateral in which a security interest may be perfected upon the receipt and recording of this Agreement with the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205.

           Section 3.04 Absence of Other Liens . The Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 4.10 of the Indenture (including, without limitation, Liens granted in the ABL Collateral in favor of the ABL Collateral Agent pursuant to the ABL Loan Documents). The Grantors have not (i) filed or consented to the filing of (A) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Collateral, (B) 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 (C) 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 or (ii) entered into any agreement in which any Grantor grants Control over any Collateral, except, in each case, with respect to Liens expressly permitted pursuant to Section 4.10 of the Indenture (including, without limitation, Liens granted in the ABL Collateral in favor of the ABL Collateral Agent pursuant to the ABL Loan Documents).

           Section 3.05 [Reserved]

           Section 3.06 Claims . As of the date hereof, none of the Collateral consists of a Claim with respect to which any Grantor is a party to any judicial action or arbitration proceeding having a value in excess of $1,000,000, except as set forth on Schedule V hereto.

           Section 3.07 Instruments and Chattel Paper . As of the date hereof, no amounts payable under or in connection with any of the Collateral are evidenced by any Instrument or Chattel Paper with an individual face value in excess of $500,000 (or, with respect to all such Instruments or Chattel Paper, an aggregate face value in excess of $1,000,000), other than such Instruments and Chattel Paper listed in Schedule VI hereto.

           Section 3.08 Securities Accounts and Commodity Accounts . As of the date hereof, no Grantor has any Securities Accounts or Commodity Accounts other than those listed in Schedule VII hereto.

           Section 3.09 Electronic Chattel Paper and Transferable Records . As of the date hereof, no amount under or in connection with any of the Collateral is evidenced by any Electronic Chattel Paper or any “transferable record” (as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act, as in effect in any relevant jurisdiction) with an individual face value in excess of $500,000 (or, with respect to all such Electronic Chattel Paper or transferable records, an aggregate face value in excess of $1,000,000), other than such Electronic Chattel Paper and transferable records listed in Schedule VIII hereto.

           Section 3.10 Fair Labor Standards Act . All of such Grantor’s Inventory has or will have been produced in compliance with the applicable requirements of the Fair Labor Standards Act, as amended from time to time, or any successor statute, and regulations promulgated thereunder.

ARTICLE IV
COVENANTS

           Section 4.01 Change of Name; Location of Collateral; Records; Place of Business .

          (a) Each Grantor agrees to furnish to the Collateral Agent at least fifteen (15) days (or such shorter period of time as may be agreed to by the Collateral Agent) prior written notice of any change (i) in its corporate, limited liability company or partnership name, (ii) in the location of its chief executive office or its principal place of business (including the establishment of any such new office or facility), (iii) in its organizational structure or (iv) in its Federal Taxpayer Identification Number or state organizational number. Each Grantor agrees not to effect or permit any change referred to above in this Section 4.01 unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected Lien (prior and superior in right and interest to any other Person other than with respect to Permitted Liens) in all the Collateral. Each Grantor agrees promptly to notify the Collateral Agent if any material portion of the Collateral owned or held by such Grantor is damaged or destroyed.

          (b) Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and deliver to the Collateral Agent a duly certified schedule or schedules in form and detail reasonably satisfactory to the Collateral Agent showing the identity, amount and location of any and all Collateral.

           Section 4.02 Periodic Certification . Each year, at the time of delivery (or filings with the Commission) of annual financial statements with respect to the preceding fiscal year pursuant to

Section 4.19(a)(1) of the Indenture, the Company shall deliver to the Collateral Agent a certificate executed by a Financial Officer and the chief legal officer of the Company (i) setting forth the information required pursuant to Section 2 of the Perfection Certificate or confirming that there has been no change in such information since the date of such certificate or the date of the most recent certificate delivered pursuant to this Section 4.02 and (ii) certifying that (A) all Uniform Commercial Code financing statements or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (i) above and with the United States Patent and Trademark Office or the United States Copyright Office to the extent necessary to protect and perfect the Security Interest for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period) and (B) valid Blocked Account Agreements and/or DACAs are in effect with respect to all Blocked Accounts and each Deposit Account of any Grantor as to which the ABL Collateral Agent (or its agent) has Control as of such date, or if ABL Cash Management Requirements are not in effect, all Deposit Accounts (other than De Minimis Deposit Accounts). Each certificate delivered pursuant to this Section 4.02 shall identify in the format of Schedule I , II , III , or IV , as applicable, all Intellectual Property of any Grantor in existence on the date thereof and not then listed on such Schedules or previously so identified to the Collateral Agent.

           Section 4.03 Protection of Security Interest . Each Grantor shall, at its own cost and expense, take any and all actions necessary to defend title to the Collateral against all persons and to defend the Security Interest of the Collateral Agent in the Collateral against any Lien not expressly permitted pursuant to Section 4.10 of the Indenture and the priority thereof as a Lien (prior and superior in right and interest to any other Person other than with respect to Permitted Liens).

           Section 4.04 Further Assurances . Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further documents, Financing Statements, agreements and instruments and take all such further actions as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby or the validity or priority of such Security Interest, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any Financing Statements or other documents in connection herewith or therewith. Notwithstanding anything to the contrary, each Grantor shall not be required to (nor shall the Collateral Agent) mark or otherwise notate certificates of title relating to motor vehicles to indicate the Lien in favor of the Collateral Agent except to the extent that the ABL Collateral Agent proceeds to mark or otherwise notate certificates of title relating to motor vehicles to indicate the Lien in favor of the ABL Collateral Agent. Without limiting the foregoing, each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further documents, Financing Statements, agreements and instruments and take all such further actions as the Collateral Agent may from time to time reasonably request to perfect the Collateral Agent’s Security Interest in all Collateral and the Proceeds therefrom (including causing the Collateral Agent to have Control of any such Collateral to the extent required under the Indenture or this Agreement and to the extent perfection in such Collateral can be accomplished by Control). Upon the occurrence and during the continuance of an Event of Default, if any amount payable by parties other than the Grantors under or in connection with any of the Collateral shall be or become evidenced by any promissory note or other instrument, such note or instrument, duly endorsed, shall be immediately pledged and delivered to the Collateral Agent.

          Without limiting the generality of the foregoing, each Grantor hereby shall, and authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to supplement this Agreement by supplementing Schedule I , II , III , or IV , or adding additional schedules hereto to specifically identify

any asset or item that may constitute Copyrights, Licenses, Patents or Trademarks or to correct any inaccuracy of any information contained in such Schedules. Each Grantor agrees that it will use commercially reasonable efforts to take such action as shall be necessary in order that all representations and warranties hereunder shall be true and correct with respect to such Collateral within 30 days after the date it has been notified by the Collateral Agent of the specific identification of such Collateral.

           Section 4.05 Inspection and Verification . The Collateral Agent and such persons as the Collateral Agent may reasonably designate shall have the right, at the Grantors’ own cost and expense, to inspect the Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the Collateral is located, to discuss the Grantors’ affairs with the officers of the Grantors and their independent accountants and, only upon the occurrence and during the continuance of a Default, to verify Accounts or Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Collateral for the purpose of making such a verification. The Collateral Agent shall, upon the occurrence and during the continuance of a Default, have the absolute right to share any information it gains from such inspection or verification with any Secured Party.

           Section 4.06 Taxes; Encumbrances . At its option, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Collateral and not permitted pursuant to Section 4.10 of the Indenture (or after the occurrence and during the continuation of an Event of Default, whether or not permitted pursuant to Section 4.10 of the Indenture), and may pay for the maintenance and preservation of the Collateral to the extent any Grantor fails to do so as required by the Indenture or this Agreement, and each Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or any expense reasonably incurred by the Collateral Agent pursuant to the foregoing authorization; provided , however , that nothing in this Section 4.06 shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Note Documents.

           Section 4.07 Assignment of Security Interest . If at any time any Grantor shall take a security interest in any property of an Account Debtor or any other person to secure payment and performance of an Account, such Grantor shall promptly assign such security interest to the Collateral Agent. Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent has requested the filing of such assignment, such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other person granting the security interest.

           Section 4.08 Continuing Obligations of the Grantors . Each Grantor shall remain liable to observe and perform all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance; provided that such indemnity shall not, as to the Collateral Agent or any of the Secured Parties, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final judgment to have resulted from the gross negligence or willful misconduct of such party.

           Section 4.09 Use and Disposition of Collateral . None of the Grantors shall make or permit to be made an abandonment, assignment, pledge, transfer or hypothecation of the Collateral or

shall grant any other Lien in respect of the Collateral, except as expressly permitted by Sections 4.09, 4.10, 10.03, 10.04 or 11.03 of the Indenture, in each case subject to the following sentence. Unless and until the Collateral Agent shall notify the Grantors that an Event of Default shall have occurred and be continuing and that during the continuance thereof the Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of any Collateral (which notice may be given by telephone if promptly confirmed in writing), the Grantors may use and dispose of the Collateral in any lawful manner not inconsistent with the provisions of this Agreement, the Indenture or any other Note Document.

           Section 4.10 Limitation on Modification of Accounts . None of the Grantors will, without the Collateral Agent’s prior written consent, grant any extension of the time of payment of any of the Receivables, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any person liable for the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, credits, discounts, compromises or settlements granted or made in the ordinary course of business and consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged.

           Section 4.11 Insurance . The Grantors, at their own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to its property in accordance with Section 4.23 of the Indenture. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an