Common use of Excluded Property Clause in Contracts

Excluded Property. Notwithstanding any other provision of this Agreement, in no event shall the Collateral include, and no Grantor shall be deemed to have granted a security interest in, any of such Grantor’s rights or interests in or under, (i) any lease, license (including any Communications License or ownership or control thereof), contract or agreement to which such Grantor is a party or any property subject to a permitted purchase money security interest to which such Grantor is a party and any of its rights or interest thereunder, to the extent, but only to the extent, that such a grant would, under the terms of such lease, license (including any Communications License or ownership or control thereof), contract, agreement or purchase money arrangement, be prohibited by or result in a breach or violation of (x) any law, rule or regulation applicable to such Grantor or (y) the terms or a condition of, or constitute a default or forfeiture under, or create a right of termination in favor of or require a consent of any other party to, such lease, capital lease, license (including any Communications License or ownership or control thereof), contract, permit, Instrument, Security or franchise or purchase money arrangement (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such contractual or legal provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (ii) any of the outstanding Equity Interests issued by a Foreign Subsidiary or CFC Holding Company other than up to 65% of the outstanding Equity Interests of a first-tier Foreign Subsidiary or CFC Holding Company, (iii) any Equity Interests of a Person to the extent that, and for so long as (x) such Equity Interests constitute less than 100% of all Equity Interests of such Person, and the Person or Persons holding the remainder of such Equity Interests are not Subsidiaries or Affiliates of the Borrower and (y) the granting of a security interest hereunder in such Equity Interests would not be permitted by the terms of such issuing Person’s organizational or joint venture documents (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity), (iv) any motor vehicles and other assets subject to certificates of title, Letter of Credit Rights to the extent not constituting Supporting Obligations and Commercial Tort Claims with a claim value of less than $2,500,000 individually, (v) any “intent-to-use” trademark applications for which a statement of use or an amendment to allege use has not been filed (but only until such statement or amendment is filed), and solely to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of, or void, any registration that issues from such intent-to-use application under applicable federal law, (vi) (w) Excluded Deposit Accounts, (x) any leasehold real property, (y) any fee-owned real property having an individual fair market value not exceeding $2,500,000 (as reasonably determined by the Borrower in good faith and without requirement of delivery of an appraisal or other third- party valuation) and (z) any real property located outside of the United States; (vii) those assets as to which the Borrower reasonably determines in good faith that the cost of obtaining a security interest in or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby, which determination shall be communicated in writing to the Collateral Agent by the Borrower, and those assets with respect to which the granting of security interests in such assets would be prohibited by applicable law or regulation (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect; provided that notwithstanding the provisions set forth in clauses (i) through (viii) above, Excluded Property shall not include (and Collateral shall include) (A) any proceeds (as defined in the UCC) of any such assets referred to in clauses (i) through (viii) above except to the extent such proceeds constitute Excluded Property; (B) any asset or property that the Borrower or any Subsidiary Grantor has granted a Lien on or security interest in to secure any other First Priority Obligations; and (C) to the extent permitted by applicable law, and subject to the provisions of Section 18 hereof, any revenues, proceeds, products or receivables derived from business conducted pursuant to any such lease, license (or ownership or control thereof), contract or agreement referred to in clause (i) or (viii) above, the economic value of the Communications Licenses, including the proceeds derived from the sale of any Communications License or the transfer or assignment of ownership or control thereof (all such property excluded from Collateral pursuant to the foregoing clauses (i) through (viii), the “Excluded Property”).

Excluded Property. Notwithstanding any other provision of anything in Section 2.1 or elsewhere in this AgreementAgreement to the contrary, in no event shall there is specifically excluded from the Collateral includeSecurity Interest, and no Grantor the term Collateral shall be deemed to have granted a security interest in, any of such Grantor’s rights or interests in or under, not include: (i) any Equipment or Goods that is subject to a “purchase money security interest,” as such term is now or hereafter defined in the UCC, which (x) constitutes a Permitted Lien under the Credit Agreement and (y) prohibits the creation by a Grantor of a security interest therein, unless the holder thereof has consented to the creation of such a security interest; (ii) any lease, license (including any Communications License or ownership or control thereof)license, contract contract, property rights or agreement to which such any Grantor is a party or any property subject to a permitted purchase money security interest to which such Grantor is a party and any of its rights or interest interests thereunder, to or assets related thereto, if and for so long as the extent, but only to the extent, that such a grant would, under the terms of such lease, license (including any Communications License security interest or ownership or control thereof), contract, agreement or purchase money arrangement, be prohibited by lien shall constitute or result in (A) the abandonment, invalidation or unenforceability of any right, title or interest of any Grantor therein or (B) in a breach or violation of (x) any law, rule or regulation applicable termination pursuant to such Grantor or (y) the terms or a condition of, or constitute a default or forfeiture under, or create a right of termination in favor of or require a consent of any other party to, such lease, capital lease, license (including any Communications License or ownership or control thereof)license, contract, permit, Instrument, Security property rights or franchise or purchase money arrangement agreement (other than, in each case, than to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such contractual or legal provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (ii) any of the outstanding Equity Interests issued by a Foreign Subsidiary or CFC Holding Company other than up to 65% of the outstanding Equity Interests of a first-tier Foreign Subsidiary or CFC Holding Company, (iii) any Equity Interests of a Person to the extent that, and for so long as (x) such Equity Interests constitute less than 100% of all Equity Interests of such Person, and the Person or Persons holding the remainder of such Equity Interests are not Subsidiaries or Affiliates of the Borrower and (y) the granting of a security interest hereunder in such Equity Interests would not be permitted by the terms of such issuing Person’s organizational or joint venture documents (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 Law (including the Bankruptcy Code) or principles of equity), provided, however, that such security interest or lien shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement, or such asset related thereto, that does not result in any of the consequences specified in (A) or (B) above; (iii) any Inventory owned by a Grantor that contains or utilizes a patent, trademark or copyright the use of which has been licensed to such Grantor under a license described under clause (ii), which license prohibits Liens on such Inventory, provided, however, that such security interest or lien shall attach to such Inventory immediately at such time as the condition prohibiting such Lien shall be waived by the licensor of such license or otherwise remedied; (iv) any motor vehicles Equity Interest in any Foreign Subsidiary that is not a first tier Subsidiary of the Company or any other Grantor; (v) the stock or other equity interest of any Foreign Subsidiary, other than the stock or other equity interest of any first tier Foreign Subsidiary representing no more than 65% of the total combined voting power of all classes of stock or other equity interest of such Foreign Subsidiary entitled to vote and other having total assets subject to certificates greater than $5,000,000; and (vi) any Equity Interests in any Person listed on Schedule 2.1 and upon the prior written notice to, consultation with, and written acknowledgment of. the Collateral Agent, any Equity Interests in any Person which is not a Subsidiary of titlethe Company, Letter of Credit Rights in each case, if and to the extent that the terms of the Governing Documents of such Person do not constituting Supporting Obligations and Commercial Tort Claims with a claim value of less than $2,500,000 individually, (v) any “intent-to-use” trademark applications for which a statement of use or an amendment to allege use has not been filed (but only until such statement or amendment is filed), and solely to the extent, if any, that, and solely during the period, if any, in which, permit the grant of a security interest therein would impair the validity or enforceability of, or void, any registration that issues from in such intent-to-use application under applicable federal law, (vi) (w) Excluded Deposit Accounts, (x) any leasehold real property, (y) any fee-owned real property having an individual fair market value not exceeding $2,500,000 (as reasonably determined Equity Interests by the Borrower in good faith and without requirement owner thereof or the applicable Grantor has been unable to obtain any approval or consent to the creation of delivery of an appraisal or other third- party valuation) and (z) any real property located outside of the United States; (vii) those assets as to which the Borrower reasonably determines in good faith that the cost of obtaining a security interest in or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby, therein which determination shall be communicated in writing to the Collateral Agent by the Borrower, and those assets with respect to which the granting of security interests in is required under such assets would be prohibited by applicable law or regulation (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect; provided that notwithstanding the provisions set forth in clauses (i) through (viii) above, Excluded Property shall not include (and Collateral shall include) (A) any proceeds (as defined in the UCC) of any such assets referred to in clauses (i) through (viii) above except to the extent such proceeds constitute Excluded Property; (B) any asset or property that the Borrower or any Subsidiary Grantor has granted a Lien on or security interest in to secure any other First Priority Obligations; and (C) to the extent permitted by applicable law, and subject to the provisions of Section 18 hereof, any revenues, proceeds, products or receivables derived from business conducted pursuant to any such lease, license (or ownership or control thereof), contract or agreement referred to in clause (i) or (viii) above, the economic value of the Communications Licenses, including the proceeds derived from the sale of any Communications License or the transfer or assignment of ownership or control thereof (all such property excluded from Collateral pursuant to the foregoing clauses (i) through (viii), the “Excluded Property”)organizational documents.

Excluded Property. Notwithstanding anything to the contrary set forth in Section 5.1 above, the types or items of Collateral described in such Section shall not include: (a) any other provision of this Agreement, in no event shall the Collateral include, and no Grantor shall be deemed to have granted a security interest in, any of such Grantor’s rights or interests in or underany contract, (i) any lease, permit, license, charter or license (including any Communications License agreement covering real or ownership or control thereof)personal property, contract or agreement to which such Grantor is a party or any property subject to a permitted purchase money security interest to which such Grantor is a party and any of its rights or interest thereunderas such, to the extent, but only to the extent, that such a grant would, if under the terms of such lease, license (including any Communications License or ownership or control thereof), contract, agreement or purchase money arrangement, be prohibited by or result in a breach or violation of (x) any law, rule or regulation applicable to such Grantor or (y) the terms or a condition of, or constitute a default or forfeiture under, or create a right of termination in favor of or require a consent of any other party to, such lease, capital lease, license (including any Communications License or ownership or control thereof), contract, permit, Instrumentlicense, Security charter or franchise license agreement, or purchase money arrangement applicable law with respect thereto, the valid grant of a security interest or lien therein to Agent is prohibited and such prohibition has not been or is not waived or the consent of the other party to such contract, lease, permit, license, charter or license agreement has not been or is not otherwise obtained or under applicable law such prohibition cannot be waived; PROVIDED, THAT, the foregoing exclusion shall in no way be construed (other than, in each case, i) to the extent that apply if any such law, rule, regulation, term or condition would be rendered ineffective pursuant to prohibition is unenforceable under Sections 9-406, 9-407, 407 or 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such contractual or legal provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (ii) so as to limit, impair or otherwise affect Agent's unconditional continuing security interests in and liens upon any rights or interests of the outstanding Equity Interests issued by a Foreign Subsidiary Borrower in or CFC Holding Company other than up to 65% of the outstanding Equity Interests of a first-tier Foreign Subsidiary monies due or CFC Holding Companyto become due under any such contract, lease, permit, license, charter or license agreement (iiiincluding any Receivables); (b) any Equity Interests of Equipment acquired after the date hereof which is subject to a Person to the extent that, and for so long as purchase money lien or purchase money security interest (xincluding Capital Leases) such Equity Interests constitute less than 100% of all Equity Interests of such Person, and the Person or Persons holding the remainder of such Equity Interests are not Subsidiaries or Affiliates of the Borrower and permitted under Section 9.8 hereof if: (yi) the granting of a security interest hereunder in such Equity Interests would not be permitted by the terms of such issuing Person’s organizational or joint venture documents (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity), (iv) any motor vehicles and other assets subject to certificates of title, Letter of Credit Rights to the extent not constituting Supporting Obligations and Commercial Tort Claims with a claim value of less than $2,500,000 individually, (v) any “intent-to-use” trademark applications for which a statement of use or an amendment to allege use has not been filed (but only until such statement or amendment is filed), and solely to the extent, if any, that, and solely during the period, if any, in which, the valid grant of a security interest therein would impair or lien to Agent in such item of Equipment is prohibited by the validity terms of the agreement between Borrower and the holder of such 45 purchase money lien or enforceability ofsecurity interest or under applicable law and such prohibition has not been or is not waived, or voidthe consent of the holder of the purchase money mortgage or other purchase money lien or security interest has not been or is not otherwise obtained, any registration that issues from such intent-to-use application or under applicable federal law, (vi) (w) Excluded Deposit Accounts, (x) any leasehold real property, (y) any fee-owned real property having an individual fair market value law such prohibition cannot exceeding $2,500,000 (as reasonably determined by the Borrower in good faith and without requirement of delivery of an appraisal or other third- party valuation) be waived and (zii) any real property located outside the purchase money lien or security interest on such item of Equipment is or shall become valid and perfected; (c) the Capital Stock of the United States; Foreign Subsidiaries in excess of sixty-six (vii66%) those assets as percent of all of the issued and outstanding shares of Capital Stock of such Subsidiary, provided, that, for purposes of the laws of Australia and any State thereof, Section 5.1 shall not be deemed to which the Borrower reasonably determines in good faith that the cost of obtaining grant a security interest in or perfection thereof are excessive in relation to the benefit to the Lenders any of the security to be afforded thereby, which determination shall be communicated in writing to the Collateral Agent by the Borrower, and those assets with respect to which the granting shares of security interests in such assets would be prohibited by applicable law or regulation Capital Stock of AEP Industries (other than, in each case, to the extent that any such law, rule, regulation, term or condition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisionsAustralia) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect; provided that notwithstanding the provisions set forth in clauses (i) through (viii) above, Excluded Property shall not include (and Collateral shall include) (A) any proceeds (as defined in the UCC) of any such assets referred to in clauses (i) through (viii) above except Pty Ltd. to the extent such proceeds constitute Excluded Property; shares are subject to the pledge and security interest of Agent pursuant to the Pledge and Security Agreement by Borrower in favor of Agent with respect thereto (B) and if for any asset or property that the Borrower or any Subsidiary Grantor has granted reason this Agreement were deemed to create a Lien on or security interest in to secure any other First Priority Obligations; and of such shares of AEP Industries (CAustralia) to the extent permitted by applicable law, and Pty Ltd. as result of such shares not being subject to the provisions of Section 18 hereofPledge and Security Agreement, any revenues, proceeds, products or receivables derived from business conducted pursuant to any such lease, license (or ownership or control thereof), contract or agreement referred to in clause (i) or (viii) above, then the economic value amount of the Communications Licenses, including Obligations secured by the proceeds derived from the sale of any Communications License or the transfer or assignment of ownership or control thereof (all such property excluded from Collateral pursuant shares will be limited to the foregoing clauses (i) through (viii)Limitation Amount, as such term is defined in the “Excluded Property”Pledge and Security Agreement by Borrower with respect thereto). (d) the Wrightsville Fixed Assets.

Excluded Property. Notwithstanding any other provision of anything in Section 2.1 or elsewhere in this AgreementAgreement to the contrary, in no event shall there is specifically excluded from the Collateral includeSecurity Interest, and no Grantor the term Collateral shall be deemed to have granted a security interest in, any of such Grantor’s rights or interests in or under, not include: (i) any Equipment or Goods that is subject to a "purchase money security interest," as such term is now or hereafter defined in the UCC, which (x) constitutes a Permitted Lien under the Credit Agreement and (y) prohibits the creation by the Grantor of a security interest therein, unless the holder thereof has consented to the creation of such a security interest; (ii) any lease, license (including any Communications License or ownership or control thereof)license, contract contract, property rights or agreement to which such Grantor is a party or any property subject to a permitted purchase money security interest to which such Grantor is a party and any of its rights or interest interests thereunder, to or assets related thereto, if and for so long as the extent, but only to the extent, that such a grant would, under the terms of such lease, license (including any Communications License security interest or ownership or control thereof), contract, agreement or purchase money arrangement, be prohibited by lien shall constitute or result in (A) the abandonment, invalidation or unenforceability of any right, title or interest of the Grantor therein or (B) in a breach or violation of (x) any law, rule or regulation applicable termination pursuant to such Grantor or (y) the terms or a condition of, or constitute a default or forfeiture under, or create a right of termination in favor of or require a consent of any other party to, such lease, capital lease, license (including any Communications License or ownership or control thereof)license, contract, permit, Instrument, Security property rights or franchise or purchase money arrangement (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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) agreement of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such contractual or legal provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (ii) any of the outstanding Equity Interests issued by a Foreign Subsidiary or CFC Holding Company other than up to 65% of the outstanding Equity Interests of a first-tier Foreign Subsidiary or CFC Holding Company, (iii) any Equity Interests of a Person to the extent that, and for so long as (x) such Equity Interests constitute less than 100% of all Equity Interests of such Person, and the Person or Persons holding the remainder of such Equity Interests are not Subsidiaries or Affiliates of the Borrower and (y) the granting of a security interest hereunder in such Equity Interests would not be permitted by the terms of such issuing Person’s organizational or joint venture documents (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the U. S. Bankruptcy Code) or principles of equity), provided, however, that such security interest or lien shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement, or such asset related thereto, that does not result in any of the consequences specified in (A) or (B) above; (iii) any Inventory owned by the Grantor that contains or utilizes a patent, trademark or copyright the use of which has been licensed to Grantor under a license described under clause (ii), which license prohibits Liens on such Inventory, provided, however, that such security interest or lien shall attach to such Inventory immediately at such time as the condition prohibiting such Lien shall be waived by the licensor of such license or otherwise remedied; and (iv) any motor vehicles and other assets subject to certificates of title, Letter of Credit Rights to the extent not constituting Supporting Obligations and Commercial Tort Claims with a claim value of less than $2,500,000 individually, (v) any “intent-to-use” trademark applications for which a statement of use or an amendment to allege use has not been filed (but only until such statement or amendment is filed), and solely to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of, or void, any registration that issues from such intent-to-use application under applicable federal law, (vi) (w) Excluded Deposit Accounts, (x) any leasehold real property, (y) any fee-owned real property having an individual fair market value not exceeding $2,500,000 (as reasonably determined by the Borrower in good faith and without requirement of delivery of an appraisal or other third- party valuation) and (z) any real property located outside of the United States; (vii) those assets as to which the Borrower reasonably determines in good faith that the cost of obtaining a security interest in or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby, which determination shall be communicated in writing to the Collateral Agent by the Borrower, and those assets with respect to which the granting of security interests in such assets would be prohibited by applicable law or regulation (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect; provided that notwithstanding the provisions set forth in clauses (i) through (viii) above, Excluded Property shall not include (and Collateral shall include) (A) any proceeds (as defined in the UCC) of any such assets referred to in clauses (i) through (viii) above except to the extent such proceeds constitute Excluded Intellectual Property; (B) any asset or property that the Borrower or any Subsidiary Grantor has granted a Lien on or security interest in to secure any other First Priority Obligations; and (C) to the extent permitted by applicable law, and subject to the provisions of Section 18 hereof, any revenues, proceeds, products or receivables derived from business conducted pursuant to any such lease, license (or ownership or control thereof), contract or agreement referred to in clause (i) or (viii) above, the economic value of the Communications Licenses, including the proceeds derived from the sale of any Communications License or the transfer or assignment of ownership or control thereof (all such property excluded from Collateral pursuant to the foregoing clauses (i) through (viii), the “Excluded Property”).

Excluded Property. Notwithstanding any other provision of this Agreement, in no event shall the Collateral include, and no Grantor shall be deemed to have granted a security interest in, any of such Grantor’s rights or interests in or under, (i) any lease, license (including any Communications License or ownership or control thereof), contract or agreement to which such Grantor is a party or any property subject to a permitted purchase money security interest to which such Grantor is a party and any of its rights or interest thereunder, to the extent, but only to the extent, that such a grant would, under the terms of such lease, license (including any Communications License or ownership or control thereof), contract, agreement or purchase money arrangement, be prohibited by or result in a breach or violation of (x) any law, rule or regulation applicable to such Grantor or (y) the terms or a condition of, or constitute a default or forfeiture under, or create a right of termination in favor of or require a consent of any other party to, such lease, capital lease, license (including any Communications License or ownership or control thereof), contract, permit, Instrument, Security or franchise or purchase money arrangement (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such contractual or legal provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (ii) any of the outstanding Equity Interests issued by a Foreign Subsidiary or CFC Holding Company other than up to 65% of the outstanding Equity Interests of a first-tier Foreign Subsidiary or CFC Holding Company, (iii) any Equity Interests of a Person to the extent that, and for so long as (x) such Equity Interests constitute less than 100% of all Equity Interests of such Person, and the Person or Persons holding the remainder of such Equity Interests are not Subsidiaries or Affiliates of the Borrower Issuer and (y) the granting of a security interest hereunder in such Equity Interests would not be permitted by the terms of such issuing Person’s organizational or joint venture documents (other than, in each case, to the extent that any such law, rule, regulation, term or condition would be rendered ineffective pursuant to Sections 9-406, 9- 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 (including the Bankruptcy Code) or principles of equity), (iv) any motor vehicles and other assets subject to certificates of title, Letter of Credit Rights to the extent not constituting Supporting Obligations and Commercial Tort Claims with a claim value of less than $2,500,000 individually, (v) any “intent-to-use” trademark applications for which a statement of use or an amendment to allege use has not been filed (but only until such statement or amendment is filed), and solely to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of, or void, any registration that issues from such intent-to-use application under applicable federal law, (vi) (w) Excluded Deposit Accounts, (x) any leasehold real property, (y) any fee-owned real property having an individual fair market value not exceeding $2,500,000 (as reasonably determined by the Borrower Issuer in good faith and without requirement of delivery of an appraisal or other third- third-party valuation) and (z) any real property located outside of the United States; (vii) those assets as to which the Borrower Issuer reasonably determines in good faith that the cost of obtaining a security interest in or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby, which determination shall be communicated in writing to the Collateral Agent by the BorrowerIssuer, and (viii) those assets with respect to which the granting of security interests in such assets would be prohibited by applicable law or regulation (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect; provided that notwithstanding the provisions set forth in clauses (i) through (viii) above, Excluded Property shall not include (and Collateral shall include) (A) any proceeds (as defined in the UCC) of any such assets referred to in clauses (i) through (viii) above except to the extent such proceeds constitute Excluded Property; (B) any asset or property that the Borrower Issuer or any Subsidiary Grantor has granted a Lien on or security interest in to secure any other First Priority Obligations; and (C) to the extent permitted by applicable law, and subject to the provisions of Section 18 hereof, any revenues, proceeds, products or receivables derived from business conducted pursuant to any such lease, license (or ownership or control thereof), contract or agreement referred to in clause (i) or (viii) above, the economic value of the Communications Licenses, including the proceeds derived from the sale of any Communications License or the transfer or assignment of ownership or control thereof (all such property excluded from Collateral pursuant to the foregoing clauses (i) through (viii), the “Excluded Property”).

Excluded Property. Notwithstanding any other provision of this Agreement, in no event shall the Collateral include, and no Grantor shall be deemed to have granted a security interest in, any of such Grantor’s rights or interests in or under, (i) any lease, license (including any Communications License or ownership or control thereof), contract or agreement to which such Grantor is a party or any property subject to a permitted purchase money security interest to which such Grantor is a party and any of its rights or interest thereunder, to the extent, but only to the extent, that such a grant would, under the terms of such lease, license (including any Communications License or ownership or control thereof), contract, agreement or purchase money arrangement, be prohibited by or result in a breach or violation of (x) any law, rule or regulation applicable to such Grantor or (y) the terms or a condition of, or constitute a default or forfeiture under, or create a right of termination in favor of or require a consent of any other party to, such lease, capital lease, license (including any Communications License or ownership or control thereof), contract, permit, Instrument, Security or franchise or purchase money arrangement (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided provided, that immediately upon the ineffectiveness, lapse or termination of any such contractual or legal provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (ii) any of the outstanding Equity Interests issued by a Foreign Subsidiary or CFC Holding Company other than up to 65% of the outstanding Equity Interests of a first-tier Foreign Subsidiary or CFC Holding Company, (iii) any Equity Interests of a Person (other than a Subsidiary of the Borrower) to the extent that, and for so long as (x) such Equity Interests constitute less than 100% of all Equity Interests of such Person, and the Person or Persons holding the remainder of such Equity Interests are not Subsidiaries or Affiliates of the Borrower and (y) the granting of a security interest hereunder in such Equity Interests would not be permitted by the terms of such issuing Person’s organizational or joint venture documents (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity), (iv) any motor vehicles and other assets subject to certificates of title, Letter of Credit Rights to the extent not constituting Supporting Obligations and Commercial Tort Claims with a claim value of less than $2,500,000 individually, (v) any “intent-to-use” trademark applications for which a statement of use or an amendment to allege use has not been filed (but only until such statement or amendment is filed), and solely to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of, or void, any registration that issues from such intent-to-use application under applicable federal law, (vi) (w) Excluded Deposit Accounts, (x) any leasehold real property, (y) any fee-owned real property having an individual fair market value not exceeding $2,500,000 (as reasonably determined by the Borrower in good faith and without requirement of delivery of an appraisal or other third- party valuation) and (z) any real property located outside of the United States; (vii) those assets as to which the Borrower reasonably determines in good faith that the cost of obtaining a security interest in or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby, which determination shall be communicated in writing to the Collateral Agent by the Borrower, and those assets with respect to which the granting of security interests in such assets would be prohibited by applicable law or regulation (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided provided, that immediately upon the ineffectiveness, lapse or termination of any such provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect; provided provided, that notwithstanding the provisions set forth in clauses (i) through (viii) above, Excluded Property shall not include (and Collateral shall include) (A) any proceeds (as defined in the UCC) of any such assets referred to in clauses (i) through (viii) above except to the extent such proceeds constitute Excluded Property; (B) any asset or property that the Borrower or any Subsidiary Grantor has granted a Lien on or security interest in to secure any other First Priority Obligations[reserved]; and (C) to the extent permitted by applicable law, and subject to the provisions of Section 18 hereof, any revenues, proceeds, products or receivables derived from business conducted pursuant to any such lease, license (or ownership or control thereof), contract or agreement referred to in clause (i) or (viii) above, the economic value of the Communications Licenses, including the proceeds derived from the sale of any Communications License or the transfer or assignment of ownership or control thereof (all such property excluded from Collateral pursuant to the foregoing clauses (i) through (viii), the “Excluded Property”).

Excluded Property. Notwithstanding any other provision Sections 3.1.1 through 3.1.14, the payment and performance of this Agreement, in no event the Secured Obligations shall the Collateral include, and no Grantor shall not be deemed to have granted a security interest in, secured by any of such Grantor’s rights the following and all of the following shall not be considered to be Credit Security hereunder or interests to be within any classification contained in the definition of, or underotherwise constitute, Credit Security: (ia) any lease, license contract, license, permit or franchise (including including, without limitation, insurance policies) that validly prohibits (or with respect to any Communications License lease, contract, license, permit or ownership franchise existing on the date hereof, restricts or control thereof), contract or agreement to which requires a third party consent for) the creation by such Grantor is Obligor of a party or any property subject to a permitted purchase money security interest to which such Grantor is a party and any of its rights or interest thereunder, to the extent, but only to the extent, that such a grant would, under the terms of in such lease, license contract, license, permit (including a) if and for so long as the grant of such security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any Communications License right, title or ownership interest of any Obligor therein or control thereof)(ii) a breach or termination pursuant to the terms of, or default under any such lease, contract, agreement or purchase money arrangementlicense, be prohibited by or result in a breach or violation of (x) any law, rule or regulation applicable to such Grantor or (y) the terms or a condition of, or constitute a default or forfeiture under, or create a right of termination in favor of or require a consent of any other party to, such lease, capital lease, license (including any Communications License or ownership or control thereof), contract, permit, Instrument, Security permit or franchise or purchase money arrangement (other than, in each case, than to the extent that any such law, rule, regulation, term or condition would be rendered ineffective pursuant to Sections Section 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 (including the Bankruptcy Code) or principles of equity); provided provided, however, that immediately upon the ineffectivenessprovisions of this Section 3.1.15 shall not prohibit the security interests created by this Agreement from extending to the proceeds of such contract, lapse license, permit or termination franchise (or such rights or property) or to the monetary value of the good will and other general intangibles of the Obligors relating thereto; (b) any rights or property to the extent that any valid and enforceable law or regulation applicable to such contractual rights or legal provision property prohibits the Collateral shall include, and such Grantor shall be deemed to have granted creation of a security interest intherein; provided, all however, that the provisions of this Section 3.1.15 shall not prohibit the security interests created by this Agreement from extending to the proceeds of such rights or property or to the monetary value of the good will and interests as if such provision had never been in effect, other general intangibles of the Obligors relating thereto; (iic) any rights or property to the extent that such rights or property secure purchase money financing therefor permitted by the Credit Agreement and the agreements providing such purchase money financing prohibit the creation of a further security interest therein; provided, however, that the provisions of this Section 3.1.15 shall not prohibit the security interests created by this Agreement from extending to the proceeds of such rights or property or to the monetary value of the outstanding Equity Interests issued by a Foreign Subsidiary or CFC Holding Company good will and other general intangibles of the Obligors relating thereto; (d) more than up to 65% of the outstanding Equity Interests of a first-tier voting stock or other voting equity in any directly owned Foreign Subsidiary or CFC Holding Company, (iii) any Equity Interests of a Person to the extent that, and for so long as (x) such Equity Interests constitute less than 100% of all Equity Interests of such Person, and the Person or Persons holding the remainder of such Equity Interests are not Subsidiaries or Affiliates of the Borrower and (y) the granting of a security interest hereunder in such Equity Interests would not be permitted by the terms of such issuing Person’s organizational or joint venture documents (other than, in each case, to the extent that any the pledge of voting stock or other voting equity above such law, rule, regulation, term or condition amount would be rendered ineffective pursuant to Sections 9-406, 9- 407, 9-408 or 9-409 result in a repatriation of a material amount of foreign earnings under the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law Code (including the Bankruptcy "deemed dividend" provisions of section 956 of the Code); or (e) or principles of equity), the items described in Section 3.2 (iv) any motor vehicles but only in the event and other assets subject to certificates of title, Letter of Credit Rights to the extent the Collateral Agent has not constituting Supporting Obligations and Commercial Tort Claims with a claim value of less than $2,500,000 individually, specified that such items be included in the Credit Security pursuant thereto); (vf) any “intent-to-use” trademark applications for which a statement shares of use or an amendment to allege use has not been filed (but only until such statement or amendment is filed)capital stock, and solely to the extent, if any, that, and solely during the period, if any, in which, the grant other evidence of a security interest therein would impair the validity or enforceability of, or void, any registration that issues from such intent-to-use application under applicable federal law, (vi) (w) Excluded Deposit Accounts, (x) any leasehold real property, (y) any fee-owned real property having an individual fair market value not exceeding $2,500,000 (as reasonably determined by the Borrower in good faith and without requirement of delivery of an appraisal or other third- party valuation) and (z) any real property located outside of the United States; (vii) those assets as to which the Borrower reasonably determines in good faith that the cost of obtaining a security beneficial interest in or perfection thereof other equity right in Congoleum Corporation; or (g) Accounts from Congoleum relating to rights under insurance policies of Congoleum and indemnification rights under the Congoleum Plan, the Congoleum Plan Trust, the Congoleum Joint Venture Agreement and the Congoleum Plan Note, and (ii) proceeds from such insurance policies and such rights of indemnification that are excessive in relation to the benefit to the Lenders of the security required to be afforded thereby, which determination shall be communicated in writing to the Collateral Agent by the Borrower, and those assets with respect to which the granting of security interests in such assets would be prohibited by applicable law or regulation (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect; provided that notwithstanding the provisions set forth in clauses (i) through (viii) above, Excluded Property shall not include (and Collateral shall include) (A) any proceeds (as defined in the UCC) of any such assets referred to in clauses (i) through (viii) above except to the extent such proceeds constitute Excluded Property; (B) any asset or property that the Borrower or any Subsidiary Grantor has granted a Lien on or security interest in to secure any other First Priority Obligations; and (C) to the extent permitted by applicable law, and subject to the provisions of Section 18 hereof, any revenues, proceeds, products or receivables derived from business conducted pursuant to any such lease, license (or ownership or control thereof), contract or agreement referred to in clause (i) or (viii) above, the economic value of the Communications Licenses, including the proceeds derived from the sale of any Communications License or the transfer or assignment of ownership or control thereof (all such property excluded from Collateral pledged pursuant to the foregoing clauses (i) through (viii), the “Excluded Property”)Congoleum Plan.

Excluded Property. Notwithstanding any other provision of anything in Section 2.1 or elsewhere in this AgreementAgreement to the contrary, in no event shall there is specifically excluded from the Collateral includeSecurity Interest, and no Grantor the term Collateral shall be deemed to have granted a security interest in, any of such Grantor’s rights or interests in or under, not include: (i) any Equipment or Goods that is subject to a “purchase money security interest,” as such term is now or hereafter defined in the UCC, which (x) constitutes a Permitted Lien under the Credit Agreement and (y) prohibits the creation by a Grantor of a junior security interest therein, unless the holder thereof has consented to the creation of such a junior security interest; (ii) any lease, license (including any Communications License or ownership or control thereof)license, contract contract, property rights or agreement to which such any Grantor is a party or any property subject to a permitted purchase money security interest to which such Grantor is a party and any of its rights or interest thereunder, to interests thereunder if and for so long as the extent, but only to the extent, that such a grant would, under the terms of such lease, license (including any Communications License security interest or ownership or control thereof), contract, agreement or purchase money arrangement, be prohibited by lien shall constitute or result in (A) the abandonment, invalidation or unenforceability of any right, title or interest of any Grantor therein or (B) in a breach or violation of (x) any law, rule or regulation applicable termination pursuant to such Grantor or (y) the terms or a condition of, or constitute a default or forfeiture under, or create a right of termination in favor of or require a consent of any other party to, such lease, capital lease, license (including any Communications License or ownership or control thereof)license, contract, permit, Instrument, Security property rights or franchise or purchase money arrangement agreement (other than, in each case, than to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided , provided, however, that such security interest or lien shall attach immediately upon at such time as the ineffectivenesscondition causing such abandonment, lapse invalidation or termination of any such contractual or legal provision the Collateral shall include, and such Grantor unenforceability shall be deemed remedied and to have granted a security interest inthe extent severable, all shall attach immediately to any portion of such lease, license, contract, property rights and interests as if such provision had never been or agreement that does not result in effect, (ii) any of the outstanding Equity Interests issued consequences specified in (A) or (B) above; (iii) any Inventory owned by a Grantor that contains or utilizes a patent, trademark or copyright the use of which has been licensed to such Grantor under a license described under clause (ii), which license prohibits Liens on such Inventory, provided, however, that such security interest or lien shall attach to such Inventory immediately at such time as the condition prohibiting such Lien shall be waived by the licensor of such license or otherwise remedied; (iv) any Equity Interest in any Foreign Subsidiary that is not a first tier Subsidiary of the Company or CFC Holding Company any other Grantor; (v) the stock or other equity interest of any Foreign Subsidiary, other than up to the stock or other equity interest of any first tier Foreign Subsidiary representing no more than 65% of the outstanding Equity Interests total combined voting power of a first-tier all classes of stock or other equity interest of such Foreign Subsidiary or CFC Holding Company, entitled to vote and having total assets greater than $5,000,000; and (iiivi) any Equity Interests in any Person listed on Schedule 2.1 and upon the written consent of a Person to the extent thatCollateral Agent, and for so long as (x) such any Equity Interests constitute less than 100% of all Equity Interests of such Person, and the Person or Persons holding the remainder of such Equity Interests are in any Pledged Entity which is not Subsidiaries or Affiliates a Subsidiary of the Borrower and (y) the granting of a security interest hereunder in such Equity Interests would not be permitted by the terms of such issuing Person’s organizational or joint venture documents (other thanCompany, in each case, if and to the extent that any such law, rule, regulation, term or condition would be rendered ineffective pursuant to Sections 9-406, 9- 407, 9-408 or 9-409 the terms of the UCC (or any successor provision or provisions) organizational documents of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity), (iv) any motor vehicles and other assets subject to certificates of title, Letter of Credit Rights to the extent such Pledged Entity do not constituting Supporting Obligations and Commercial Tort Claims with a claim value of less than $2,500,000 individually, (v) any “intent-to-use” trademark applications for which a statement of use or an amendment to allege use has not been filed (but only until such statement or amendment is filed), and solely to the extent, if any, that, and solely during the period, if any, in which, permit the grant of a security interest therein would impair the validity or enforceability of, or void, any registration that issues from in such intent-to-use application under applicable federal law, (vi) (w) Excluded Deposit Accounts, (x) any leasehold real property, (y) any fee-owned real property having an individual fair market value not exceeding $2,500,000 (as reasonably determined Equity Interests by the Borrower in good faith and without requirement owner thereof or the applicable Grantor has been unable to obtain any approval or consent to the creation of delivery of an appraisal or other third- party valuation) and (z) any real property located outside of the United States; (vii) those assets as to which the Borrower reasonably determines in good faith that the cost of obtaining a security interest in or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby, therein which determination shall be communicated in writing to the Collateral Agent by the Borrower, and those assets with respect to which the granting of security interests in is required under such assets would be prohibited by applicable law or regulation (other than, in each case, to the extent that any such law, rule, regulation, term or condition 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 (including the Bankruptcy Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such provision the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect; provided that notwithstanding the provisions set forth in clauses (i) through (viii) above, Excluded Property shall not include (and Collateral shall include) (A) any proceeds (as defined in the UCC) of any such assets referred to in clauses (i) through (viii) above except to the extent such proceeds constitute Excluded Property; (B) any asset or property that the Borrower or any Subsidiary Grantor has granted a Lien on or security interest in to secure any other First Priority Obligations; and (C) to the extent permitted by applicable law, and subject to the provisions of Section 18 hereof, any revenues, proceeds, products or receivables derived from business conducted pursuant to any such lease, license (or ownership or control thereof), contract or agreement referred to in clause (i) or (viii) above, the economic value of the Communications Licenses, including the proceeds derived from the sale of any Communications License or the transfer or assignment of ownership or control thereof (all such property excluded from Collateral pursuant to the foregoing clauses (i) through (viii), the “Excluded Property”)organizational documents.