EXECUTION COPY
PATENT SECURITY AGREEMENT (this
"AGREEMENT") dated as of November 30,
2005, between GALLARUS MEDIA HOLDINGS,
INC., a Delaware corporation (the
"GRANTOR") and CREDIT SUISSE, as the
Collateral Agent (as defined below).
PRELIMINARY STATEMENT
Reference is made to (a) the Revolving Loan Credit Agreement dated as
of November 30, 2005 (as amended, restated, supplemented or otherwise modified
from time to time, the "REVOLVING LOAN CREDIT AGREEMENT"), among Network
Communications, Inc., a Georgia corporation (the "BORROWER"), the Grantor, the
lenders from time to time party thereto (the "REVOLVING LENDERS") and Credit
Suisse, as administrative agent, (b) the Term Loan Credit Agreement dated as of
November 30, 2005 (as amended, restated, supplemented or otherwise modified from
time to time, the "TERM LOAN CREDIT AGREEMENT" and, together with the Revolving
Loan Credit Agreement, the "CREDIT AGREEMENTS"), among the Borrower, the
Grantor, the lenders from time to time party thereto (the "TERM LENDERS" and,
together with the Revolving Lenders, the "LENDERS") and Credit Suisse, as
administrative agent, and (c) the Guarantee, Collateral and Intercreditor
Agreement dated as of November 30, 2005 (as amended, restated, supplemented or
otherwise modified from time to time, the "GUARANTEE, COLLATERAL AND
INTERCREDITOR AGREEMENT"), among the Borrower, the Grantor, the subsidiaries
party thereto and Credit Suisse, in its separate capacities as collateral agent
(in such capacity, the "COLLATERAL AGENT") for the Secured Parties (as defined
in the Guarantee, Collateral and Intercreditor Agreement), and as administrative
agent under each of the Credit Agreements.
The Revolving Lenders and the Issuing Bank have agreed to extend
credit to the Borrower subject to the terms and conditions set forth in the
Revolving Loan Credit Agreement, and the Term Lenders have agreed to make term
loans to the Borrower subject to the terms and conditions set forth in the Term
Loan Credit Agreement. The obligations of the Lenders and the Issuing Bank to
extend such credit are conditioned upon, among other things, the execution and
delivery of this Agreement. The Grantor is an affiliate of the Borrower, will
derive substantial benefits from the extension of credit to the Borrower
pursuant to the Credit Agreements and is willing to execute and deliver this
Agreement in order to induce the Lenders and the Issuing Bank to extend such
credit.
Accordingly, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor hereby agrees as
follows:
SECTION 1. DEFINED TERMS. All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Revolving Loan Credit
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Agreement, the Term Loan Credit Agreement or the Guarantee, Collateral and
Intercreditor Agreement, as applicable.
SECTION 2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. The
Grantor hereby grants to the Collateral Agent (and its successors and assigns),
for the ratable benefit of the Secured Parties, a continuing security interest
in all of the Grantor's right, title and interest in, to and under the
following, whether presently existing or hereafter created or acquired
(collectively, the "PATENT COLLATERAL"):
(a) all of its Patents, including, without limitation, those referred
to on Schedule I hereto;
(b) all reissues, continuations or extensions of the foregoing;
(c) all products and proceeds of the foregoing, including, without
limitation, any claim by the Grantor against third parties for past,
present or future infringement or dilution of any Patent.
SECTION 3. GUARANTEE AND COLLATERAL AGREEMENT. The security interests
granted pursuant to this Agreement are granted in conjunction with the security
interests granted to the Collateral Agent (and its successors and assigns), for
the ratable benefit of the Secured Parties, pursuant to the Guarantee,
Collateral and Intercreditor Agreement. The Grantor hereby acknowledges and
affirms that the rights and remedies of the Collateral Agent with respect to the
security interest in the Patent Collateral made and granted hereby are more
fully set forth in the Guarantee, Collateral and Intercreditor Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein, and in the event of any conflict between the terms and/or
conditions of this Agreement and the terms of the Guarantee, Collateral and
Intercreditor Agreement, the terms and/or conditions of the Guarantee,
Collateral and Intercreditor Agreement shall control.
SECTION 4. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the Grantor has caused this Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above.
GALLARUS MEDIA HOLDINGS, INC.,
by
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Name:
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Title:
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ACCEPTED AND ACKNOWLEDGED BY:
CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
as Collateral Agent,
by
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Name:
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Title:
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by
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Name:
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Title:
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SCHEDULE I
TO
PATENT SECURITY AGREEMENT
U.S. Patent Registrations
Patent Numbers Issue Date Title
-------------- --------------- --------------------------
D361,684 August 29, 1995 Magazine Distribution Rack
D371,471 July 9, 1996 Magazine Distribution Rack
U.S. Patent Applications
None.
