EXECUTION COPY

PLEDGE AND SECURITY AGREEMENT

DATED AS OF JUNE 30, 2003

AMONG

ALARIS MEDICAL SYSTEMS, INC.
AS A GRANTOR

AND

EACH OTHER GRANTOR
FROM TIME TO TIME PARTY HERETO

AND

CITICORP NORTH AMERICA, INC.
AS ADMINISTRATIVE AGENT

WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153-0119

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        PLEDGE AND SECURITY AGREEMENT, dated as of June 30, 2003, by ALARIS
MEDICAL SYSTEMS, INC. (the “Borrower”) and each of the other entities listed on
the signature pages hereof or that becomes a party hereto pursuant to
Section 7.10 (Additional Grantors) (each a “Grantor” and, collectively, the
“Grantors”), in favor of CITICORP NORTH AMERICA, INC. (“Citicorp”), as agent for
the Secured Parties (as defined in the Credit Agreement referred to below) (in
such capacity, the “Administrative Agent”).

W I T N E S S E T H:

        WHEREAS, pursuant to the Credit Agreement, dated as of June 30, 2003 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the Borrower, the Lenders and the
Issuers party thereto and Citicorp, as agent for the Lenders and the Issuers,
UBS SECURITIES LLC, as syndication agent for the Lenders and the Issuers (in
such capacity, the “Syndication Agent”), and BEAR STEARNS CORPORATE LENDING INC.
and CIBC WORLD MARKETS CORP., as co-documentation agents for the Lenders and the
Issuers (in such capacity, each a “Co-Documentation Agent” and collectively, the
“Co-Documentation Agents”), the Lenders and the Issuers have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;

        WHEREAS, the Grantors other than the Borrower are party to the Guaranty
pursuant to which they have guaranteed the Obligations; and

        WHEREAS, it is a condition precedent to the obligation of the Lenders
and the Issuers to make their respective extensions of credit to the Borrower
under the Credit Agreement that the Grantors shall have executed and delivered
this Agreement to the Administrative Agent;

        NOW, THEREFORE, in consideration of the premises and to induce the
Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:

          ARTICLE I     DEFINED TERMS

Section 1.1 Definitions

(a)     Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein have the meanings given to them in the Credit Agreement.

(b)     Terms used herein without definition that are defined in the UCC have
the meanings given to them in the UCC, including the following terms (which are
capitalized herein):

  “Account Debtor”
“Accounts”
“Certificated Security”
“Chattel Paper”
“Commercial Tort Claim”
“Commodity Account”
“Deposit Account”
“Documents”
“Entitlement Holder”
“Entitlement Order”
“Equipment”
“Financial Asset”
“General Intangibles”
“Instruments”
“Inventory”
“Investment Property”
“Letter-of-Credit Right”
“Proceeds”
“Securities Account”
“Securities Intermediary”
“Security”
“Security Entitlement”

(c)     The following terms shall have the following meanings:

        “Additional Pledged Collateral” means any Pledged Collateral acquired by
any Grantor after the date hereof and on which a security interest is granted
pursuant to Section 2.2 (Grant of Security Interest in Collateral), including,
to the extent a security interest is granted thereon pursuant to Section 2.2
(Grant of Security Interest in Collateral), (i) all Stock and Stock Equivalents
of any Person that are acquired by any Grantor after the date hereof, together
with all certificates, instruments or other documents representing any of the
foregoing and all Security Entitlements of any Grantor in respect of any of the
foregoing, (ii) all additional indebtedness from time to time owed to any
Grantor by any obligor on the Pledged Debt Instruments and the instruments
evidencing such indebtedness and (iii) all interest, cash, instruments and other
property or Proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any of the foregoing. “Additional
Pledged Collateral” may be General Intangibles or Investment Property.

        “Agreement” means this Pledge and Security Agreement.

        “Australian Copyrights” means, with reference to each Grantor, all
Copyrights of such Grantor which are used in Australia, or the subject of a
filing, registration or application in IP Australia; provided, however that any
Copyrights deemed by the Stamp Duties Act of 1923 (South Australia) to have a
nexus with the State of South Australia shall not constitute Australian
Copyrights for purposes of this Agreement.

        “Australian Designs” means, with reference to each Grantor, all designs
of such Grantor which are used in Australia, or the subject of a filing,
registration or application in IP Australia; provided, however, that any design
deemed by the Stamp Duties Act of 1923 (South Australia) to have a nexus with
the State of South Australia shall not constitute an Australian Design for
purposes of this Agreement.

        “Australian Intellectual Property” means, collectively, all rights,
priorities and privileges of any Grantor relating to intellectual property,
whether arising under United States, Australia , multinational or foreign laws
or otherwise, including Australian Designs, Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, Trademark Licenses, trade secrets and
Internet domain names, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom, which are used in Australia, or the subject of a
filing, registration or application in IP Australia; provided, however that any
intellectual property deemed by the Stamp Duties Act of 1923 (South Australia)
to have a nexus with the State of South Australia shall not constitute
Australian Intellectual Property for purposes of this Agreement.

        “Australian Patents” means, with reference to each Grantor, all Patents
of such Grantor which are used in Australia, or the subject of a filing,
registration or application in IP Australia; provided, however that any Patent
deemed by the Stamp Duties Act of 1923 (South Australia) to have a nexus with
the State of South Australia shall not constitute an Australian Patent for
purposes of this Agreement.

        “Australian Trademarks” means, with reference to each Grantor, all
Trademarks of such Grantor which are used in Australia, or the subject of a
filing, registration or application in IP Australia; provided, however that any
Trademarks deemed by the Stamp Duties Act of 1923 (South Australia) to have a
nexus with the State of South Australia shall not constitute Australian
Trademarks.

        “Canadian Collateral” means Canadian Intellectual Property and Canadian
Pledged Stock.

        “Canadian Copyrights” means, with reference to each Grantor, all
Copyrights of such Grantor which are used in Canada, or the subject of a filing,
registration or application in the Canadian Intellectual Property Office.

        “Canadian Intellectual Property” means, collectively, all rights,
priorities and privileges of any Grantor relating to intellectual property,
whether arising under United States, Canadian, multinational or foreign laws or
otherwise, including Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks, Trademark Licenses, trade secrets and Internet domain names, and all
rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom,
which are used in Canada, or the subject of a filing, registration or
application in the Canadian Intellectual Property Office.

        “Canadian Patents” means, with reference to each Grantor, all Patents of
such Grantor which are used in Canada, or the subject of a filing, registration
or application in the Canadian Intellectual Property Office.

        “Canadian Pledged Stock” means all Pledged Certificated Stock and all
Pledged Uncertificated Stock of the Canadian Subsidiary.

        “Canadian Subsidiary” means ALARIS Medical Canada Ltd., a corporation
organized under the laws of New Brunswick, Canada and a Wholly-Owned Subsidiary
of the Borrower.

        “Canadian Trademarks” means, with reference to each Grantor, all
Trademarks of such Grantor which are used in Canada, or the subject of a filing,
registration or application in the Canadian Intellectual Property Office.

        “Collateral” has the meaning specified in Section 2.1 (Collateral).

        “Concentration Account” means any Deposit Account maintained by any Loan
Party that is (a) a concentration account or (b) that maintains, during any
calendar month, an average aggregate overnight available balance in excess of
the Dollar Equivalent of $1,000,000. For the avoidance of doubt, Qualified
Permitted Liens Accounts shall not be deemed to be Concentration Accounts for
purposes of this Agreement.

        “Control Account Agreement” means a letter agreement, substantially in
the form of Annex 2 (Form of Control Account Agreement) or in such other form as
may be required by the applicable Securities Intermediary (provided that each
Control Account Agreement shall be in form and substance reasonably satisfactory
to the Administrative Agent), executed by the relevant Grantor, the
Administrative Agent and the relevant Approved Securities Intermediary and
sufficient to perfect the Administrative Agent’s security interest in such
Securities Account by “control” within the meanings of Section 8-106 and 9-106
of the UCC.

        “Copyright Licenses” means any written agreement naming any Grantor as
licensor or licensee granting any right under any Copyright, including the grant
of any right to copy, publicly perform, create derivative works, manufacture,
distribute, exploit or sell materials derived from any Copyright.

        “Copyrights Security Agreement” means an agreement, substantially in the
form of Annex 5 (Form of Copyright Security Agreement) with such changes as may
be agreed to by the Administrative Agent, executed by the relevant Grantor and
the Administrative Agent.

        “Copyrights” means (a) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof, and
(b) the right to obtain all renewals thereof.

        “Deposit Account Bank” means a financial institution selected or
approved by the Administrative Agent and with respect to which a Grantor has
delivered to the Administrative Agent an executed Deposit Account Control
Agreement.

        “Deposit Account Control Agreement” means a letter agreement,
substantially in the form of Annex 1 (Form of Deposit Account Control Agreement)
or in such other form as may be required by the applicable Deposit Account Bank
(provided that each Deposit Account Control Agreement shall be in form and
substance reasonably satisfactory to the Administrative Agent), executed by the
relevant Grantor, the Administrative Agent and the relevant financial
institution and sufficient to perfect the Administrative Agent’s security
interest in such Deposit Account by “control” within the meaning of Section
9-104 of the UCC.

        “Excluded Disposables Increment” means, with respect to Instrument
Contracts, the amount included in the price of disposables for payment of
equipment, interest, repair and, if applicable, site license fees and certain
other consulting and/or implementation services, or any thereof, which amount is
invoiced by a Grantor to a customer and upon payment thereof by the customer is
required to be remitted by the Grantor to a third-party financing party.

        “Excluded Equity” means any Voting Stock of any direct Subsidiary of a
Grantor which Subsidiary is a controlled foreign corporation (a “CFC”), in
excess of 65% (but only to the extent of such excess) of the total outstanding
Voting Stock of such Subsidiary. In the event that the Grantor is a CFC, then
Excluded Equity shall include any stock or other interest of any direct or
indirect Subsidiary held by such Grantor. If the Grantor is not a CFC, then
Excluded Equity shall include the outstanding Voting Stock of any direct
Subsidiary of such Grantor (other than a direct Subsidiary which is a CFC) only
if the direct Subsidiary (a) is not a corporation for United States federal
income tax purposes and (b) owns Voting Stock in a CFC, but only to the extent a
pledge of such direct Subsidiary’s Voting Stock would result, for purposes of
Section 956 of the Code, in a pledge in excess of 65% of the Voting Stock of
such CFC. Notwithstanding the foregoing, Excluded Equity may be pledged if (i)
the Borrower and Administrative Agent otherwise agree or (ii) such pledge can be
made without resulting in any material adverse tax consequence for the Loan
Parties and their Subsidiaries, taken as a whole.

        “Excluded Property” means, collectively, (i) Excluded Equity, (ii) any
permit, lease, license, contract, instrument or other agreement held by any
Grantor that prohibits or requires the consent of any Person other than the
Borrower and its Affiliates as a condition to the creation by such Grantor of a
Lien thereon, or any permit, lease, license contract or other agreement held by
any Grantor to the extent that any Requirement of Law applicable thereto
prohibits the creation of a Lien thereon, but only, in each case, to the extent,
and for so long as, such prohibition is not terminated or rendered unenforceable
or otherwise deemed ineffective by the UCC or any other Requirement of Law,
(iii) Equipment owned by any Grantor that is subject to a purchase money Lien or
a Capital Lease if the contract or other agreement in which such Lien is granted
(or in the documentation providing for such Capital Lease) prohibits or requires
the consent of any Person other than the Borrower and its Affiliates as a
condition to the creation of any other Lien on such Equipment; provided,
however, “Excluded Property” shall not include any Proceeds, substitutions or
replacements of Excluded Property referred to in the foregoing clauses (i),
(ii), or (iii) of this definition (unless such Proceeds, substitutions or
replacements would constitute Excluded Property), (iv) Qualified Hedging
Obligations Collateral, (v) Qualified Hedging Contract Accounts, (vi) Qualified
Customary Permitted Liens Accounts, (vii) Excluded Disposables Increments and
(viii) any Intellectual Property deemed by the Stamp Duties Act 1923 (South
Australia) to have a nexus with the State of South Australia.

        “Intellectual Property” means, collectively, all rights, priorities and
privileges of any Grantor relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses, trade secrets and Internet domain names, and all rights to sue at law
or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.

        “Intellectual Property Security Agreement” means each Copyright Security
Agreement, Patent Security Agreement and Trademarks Security Agreement.

        “Intercompany Note” means any promissory note evidencing loans made by
any Grantor to any of its Subsidiaries or another Grantor.

        “LLC” means each limited liability company in which a Grantor has an
interest, including those set forth on Schedule 2 (Pledged Collateral).

        “LLC Agreement” means each operating agreement with respect to an LLC,
as each agreement has heretofore been, and may hereafter be, amended, restated,
supplemented or otherwise modified from time to time.

        “Material Intellectual Property” means Intellectual Property owned by or
licensed to a Grantor and material to any Grantor’s business.

        “Partnership” means each partnership in which a Grantor has an interest,
including those set forth on Schedule 2 (Pledged Collateral).

        “Partnership Agreement” means each partnership agreement governing a
Partnership, as each such agreement has heretofore been, and may hereafter be,
amended, restated, supplemented or otherwise modified.

        “Patents” means (a) all letters patent of the United States, any other
country or any political subdivision thereof and all reissues and extensions
thereof, (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part thereof
and (c) all rights to obtain any reissues or extensions of the foregoing.

        “Patent License” means all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, have
manufactured, use, import, sell or offer for sale any invention covered in whole
or in part by a Patent.

        “Patent Security Agreement” means an agreement, substantially in the
form of Annex 6 (Form of Patent Security Agreement) with such changes as may be
agreed to by the Administrative Agent, executed by the relevant Grantor and the
Administrative Agent.

        “Pledged Certificated Stock” means all Certificated Securities and any
other Stock and Stock Equivalent of a Person evidenced by a certificate,
Instrument or other equivalent document, in each case owned by any Grantor,
including all Stock listed on Schedule 2 (Pledged Collateral).

        “Pledged Collateral” means, collectively, the Pledged Stock, Pledged
Debt Instruments, any other Investment Property of any Grantor, chattel paper,
all certificates or other instruments representing any of the foregoing and all
Security Entitlements of any Grantor in respect of any of the foregoing. Pledged
Collateral may be General Intangibles or Investment Property.

        “Pledged Debt Instruments” means all right, title and interest of any
Grantor in Instruments evidencing any Indebtedness owed to such Grantor,
including all Indebtedness described on Schedule 2 (Pledged Collateral), issued
by the obligors named therein.

        “Pledged Stock” means all Pledged Certificated Stock and all Pledged
Uncertificated Stock. Pledged Stock shall not include the Stock of any Person
(i) that is not a Domestic Subsidiary, (ii) that is organized under the laws of
Australia, Mexico and the United Kingdom and (iii) the Stock of which shall be
pledged pursuant to a Foreign Pledge Agreement. For purposes of this Agreement,
the term “Pledged Stock” shall not include any Excluded Equity.

        “Pledged Uncertificated Stock” means any Stock or Stock Equivalent of
any Person that is not a Pledged Certificated Stock, including all right, title
and interest of any Grantor as a limited or general partner in any Partnership
or as a member of any LLC and all right, title and interest of any Grantor in,
to and under any Partnership Agreement or LLC Agreement to which it is a party.

        “Qualified Hedging Contract Accounts” means any deposit account,
securities account or other account established and maintained by any Grantor
with any bank, securities intermediary or other Person for the purpose of
holding Qualified Hedging Obligations Collateral; provided that such Qualified
Hedging Contract is permitted to be incurred under Section 8.17 (No Speculative
Transactions) of the Credit Agreement and the Lien on such Qualified Hedging
Obligations Collateral is permitted under Section 8.2 (Liens, Etc.) of the
Credit Agreement.

        “Qualified Customary Permitted Liens Accounts” means any deposit
account, securities account or other account established and maintained by any
Grantor with any bank, securities intermediary or other Person for the purpose
of holding Collateral to secure Customary Permitted Liens that are permitted
under Section 8.2 (Liens, Etc.) of the Credit Agreement; provided, that the
secured party with respect to such Customary Permitted Lien has required the
applicable Grantor to provide collateral security to such secured party.

        “Qualified Hedging Obligations Collateral” means any cash or cash
equivalents pledged, or in respect of which a Lien is granted by the Borrower or
any of its Subsidiaries to a Person that is not a Lender or an Affiliate of any
Lender at the time such Lien is granted, to secure any Qualified Hedging
Obligation.

        “Qualified Hedging Obligations” means the obligations of the Borrower or
any Subsidiary of the Borrower under Qualified Hedging Contracts that are not
secured by the Collateral Documents.

        “Securities Act” means the Securities Act of 1933, as amended.

        “Trademark License” means any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark.

        “Trademarks Security Agreement” means an agreement, substantially in the
form of Annex 7 (Form of Trademark Security Agreement) with such changes as may
be agreed to by the Administrative Agent, executed by the relevant Grantor and
the Administrative Agent.

        “Trademarks” means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and, in each case, all
goodwill associated therewith, whether now existing or hereafter adopted or
acquired, all registrations and recordings thereof and all applications in
connection therewith, in each case whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, and (b) the right to
obtain all renewals thereof.

        “UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York; provided, however, that, in the event that, by reason
of mandatory provisions of law, any of the attachment, perfection or priority of
the Administrative Agent’s and the Secured Parties’ security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.

        “Vehicles” means all vehicles covered by a certificate of title law of
any state.

Section 1.2 Certain Other Terms

(a)     In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding” and the
word “through” means “to and including.”

(b)     The terms “herein,” “hereof,” “hereto” and “hereunder” and similar terms
refer to this Agreement as a whole and not to any particular Article, Section,
subsection or clause in this Agreement.

(c)     References herein to an Annex, Schedule, Article, Section, subsection or
clause refer to the appropriate Annex or Schedule to, or Article, Section,
subsection or clause in this Agreement.

(d)     The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.

(e)     Where the context requires, provisions relating to any Collateral, when
used in relation to a Grantor, shall refer to such Grantor’s Collateral or any
relevant part thereof.

(f)     Any reference in this Agreement to a Loan Document shall include all
appendices, exhibits and schedules thereto, and, unless specifically stated
otherwise all amendments, restatements, supplements or other modifications
thereto, and as the same may be in effect at any time such reference becomes
operative.

(g)     The term “including” means “including without limitation” except when
used in the computation of time periods.

(h)     The terms “Lender,” “Issuer,” “Administrative Agent” and “Secured Party”
include their respective successors.

(i)     References in this Agreement to any statute shall be to such statute as
amended or modified and in effect from time to time.

        ARTICLE II  GRANT OF SECURITY INTEREST

Section 2.1 Collateral

        For the purposes of this Agreement, all of the following property now
owned or at any time hereafter acquired by a Grantor or in which a Grantor now
has or at any time in the future may acquire any right, title or interests
(other than in each case, any Excluded Property) is collectively referred to as
the “Collateral”:

(a)     all Accounts;

(b)     all Chattel Paper;

(c)     all Deposit Accounts;

(d)     all Documents;

(e)     all Equipment;

(f)     all General Intangibles (including, without limitation, the Australian
Intellectual Property and the Canadian Intellectual Property);

(g)     all Instruments;

(h)     all Inventory;

(i)     all Investment Property;

(j)     all Letter-of-Credit Rights;

(k)     all Vehicles;

(l)     the Commercial Tort Claims described on Schedule 7 (Commercial Tort
Claims) and on any supplement thereto received by the Administrative Agent
pursuant to Section 4.11 (Notice of Commercial Tort Claims);

(m)     all books and records pertaining to the other property described in this
Section 2.1;

(n)     all other goods and personal property of such Grantor, whether tangible
or intangible and wherever located;

(o)     all property of any Grantor held by the Administrative Agent or any
other Secured Party, including all property of every description, in the
possession or custody of or in transit to the Administrative Agent or such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of such Grantor or as to which such Grantor may have any right or
power; and

(p)     to the extent not otherwise included, all Proceeds.

Section 2.2 Grant of Security Interest in Collateral

        Each Grantor, as collateral security for the full, prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations of such Grantor, hereby: (a) conveys,
mortgages, pledges and hypothecates to the Administrative Agent for the benefit
of the Secured Parties, and grants to the Administrative Agent for the benefit
of the Secured Parties a lien on and security interest in, all of its right,
title and interest in, to and under the Collateral (other than the Canadian
Trademarks) of such Grantor, and (b) grants a security interest to the
Administrative Agent for the benefit of the Secured Parties in and to all of
such Grantor’s Canadian Trademarks; provided, however, that the foregoing grants
of security interests shall not include a security interest in any Excluded
Property; and provided, further, that, if and when any property shall cease to
be Excluded Property, the Administrative Agent shall have, and at all times from
and after the date hereof be deemed to have had, a security interest in such
property.

Section 2.3 Cash Collateral Accounts

        The Administrative Agent has established a Deposit Account at Citibank,
N.A., designated as “Citicorp North America, Inc. – ALARIS Medical Systems
Concentration Account”. Such Deposit Account shall be a Cash Collateral Account.

ARTICLE III  REPRESENTATIONS AND WARRANTIES

        To induce the Lenders, the Issuers and the Administrative Agent to enter
into the Credit Agreement, each Grantor hereby represents and warrants each of
the following to the Administrative Agent, the Lenders, the Issuers and the
other Secured Parties:

Section 3.1 Title; No Other Liens

        Except for the Lien granted to the Administrative Agent pursuant to this
Agreement and the other Liens permitted to exist on the Collateral under the
Credit Agreement, such Grantor (a) is the (i) record owner of the Pledged
Collateral pledged by it hereunder constituting the Stock of its Subsidiaries
and (ii) beneficial owner of the Pledged Collateral pledged by it hereunder
constituting Instruments or Certificated Securities, (b) is the Entitlement
Holder of all such Pledged Collateral constituting Investment Property held in a
Securities Account and (c) has rights in or the power to transfer each other
item of Collateral in which a Lien is granted by it hereunder, free and clear of
any other Lien.

Section 3.2 Perfection and Priority

(a)     The security interest granted pursuant to this Agreement shall
constitute a valid and continuing perfected security interest in favor of the
Administrative Agent in the Collateral for which perfection is governed by the
UCC or filing with the United States Copyright Office or with the United States
Patent and Trademark Office upon (i) the completion of the filings and other
actions specified on Schedule 3 (Filings) (which, in the case of all filings and
other documents referred to on such schedule, have been delivered to the
Administrative Agent in completed and duly executed form), (ii) the delivery to
the Administrative Agent of all Collateral consisting of Instruments and
Certificated Securities, in each case properly endorsed for transfer to the
Administrative Agent or in blank, (iii) the execution of Control Account
Agreements with respect to Collateral that constitutes Securities Accounts of a
Grantor and any Financial Assets credited to such Securities Accounts, (iv) the
execution of Deposit Account Control Agreements with respect to Collateral that
constitutes Financial Assets credited to such Deposit Accounts of a Grantor and
all deposits therein and (v) all appropriate filings having been made with the
United States Copyright Office. Such security interest shall be prior to all
other Liens on the Collateral except for (a) Customary Permitted Liens and (b )
purchase money security interests that are Permitted Liens.

(b)     The security interest granted pursuant to this Agreement shall
constitute a valid and continuing perfected security interest in favor of the
Administrative Agent in the Collateral comprised of Australian Intellectual
Property for which perfection is governed by any personal property security
legislation of Australia or filing with IP Australia upon (i) the completion of
the filings and other actions specified on Schedule 3 (Filings) (which, in the
case of all filings and other documents referred to on such schedule, have been
delivered to the Administrative Agent in completed and duly executed form) and
(ii) all appropriate filings having been made with IP Australia. Such security
interest shall be prior to all other Liens on the Collateral except for (a)
Customary Permitted Liens and (b ) purchase money security interests that are
Permitted Liens.

(c)     The security interest granted pursuant to this Agreement shall
constitute a valid and continuing perfected security interest in favor of the
Administrative Agent in the Canadian Collateral for which perfection is governed
by any personal property security legislation of Canada, or filing with the
Canadian Intellectual Property Office upon (i) the completion of the filings and
other actions specified on Schedule 3 (Filings) (which, in the case of all
filings and other documents referred to on such schedule, have been delivered to
the Administrative Agent in completed and duly executed form), (ii) the delivery
to the Administrative Agent of all Collateral consisting of Instruments and
Certificated Securities, in each case properly endorsed for transfer to the
Administrative Agent or in blank and (iii) all appropriate filings having been
made with the Canadian Intellectual Property Office. Such security interest
shall be prior to all other Liens on the Collateral except for (a) Customary
Permitted Liens and (b ) purchase money security interests that are Permitted
Liens.

Section 3.3 Jurisdiction of Organization; Chief Executive Office

        Such Grantor’s jurisdiction of organization, legal name, organizational
identification number, if any, and the location of such Grantor’s chief
executive office or sole place of business, in each case as of the date hereof,
is specified on

      Schedule 1 (Jurisdiction of Organization; Principal Executive Office) and
such

        Schedule 1 (Jurisdiction of Organization; Principal Executive Office)
also lists all jurisdictions of incorporation, legal names and locations of such
Grantor’s chief executive office or sole place of business for the five years
preceding the date hereof.

Section 3.4 Inventory and Equipment

        On the date hereof, such Grantor’s Inventory and Equipment (other than
mobile goods, Inventory or Equipment in transit, Inventory or Equipment subject
to Tooling Arrangements and Inventory or Equipment used for evaluation and
demonstration purposes) are kept at the locations listed on Schedule 4 (Location
of Inventory and Equipment) and such Schedule 4 (Location of Inventory and
Equipment) also list the locations of such Inventory and Equipment for the five
years preceding the date hereof.

Section 3.5 Pledged Collateral

(a)     The Pledged Stock pledged hereunder or pursuant to a Foreign Share
Pledge Agreement by such Grantor is listed on Schedule 2 (Pledged Collateral)
and constitute that percentage of the issued and outstanding equity of all
classes of each issuer thereof as set forth on Schedule 2 (Pledged Collateral).

(b)     All of the Pledged Stock has been duly authorized, validly issued and
are fully paid and nonassessable.

(c)     Each of the Pledged Stock constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, and general equitable principles (whether
considered in a proceeding in equity or at law).

(d)     All Pledged Collateral and, if applicable, any Additional Pledged
Collateral, consisting of Certificated Securities or Instruments has been
delivered to the Administrative Agent in accordance with Section 4.4(a) (Pledged
Collateral); provided, that to the extent any Pledged Collateral shall not have
been delivered to the Administrative Agent on the Closing Date, the Borrower
shall use its best efforts to deliver such Pledged Collateral to the
Administrative Agent within 30 days after the date hereof (or such later date as
may be agreed to by the Administrative Agent).

(e)     All Pledged Collateral held by a Securities Intermediary in a Securities
Account is in a Control Account; provided that Financial Assets having a value
in the aggregate that is less that $250,000 individually and $1,000,000 in the
aggregate (taken together with other such Financial Assets) shall not be
required to be maintained in a Control Account.

(f)     Other than (i) Pledged Stock constituting General Intangibles, (ii)
Instruments having a principal face amount of less than $250,000 individually
and $1,000,000 in the aggregate (taken together with other such Instruments) and
(iii) Chattel Paper, there is no Pledged Collateral other than that represented
by Certificated Securities or Instruments in the possession of the
Administrative Agent or that consisting of Financial Assets held in a Control
Account.

Section 3.6 Accounts

        No amount payable to such Grantor under or in connection with any
Account is evidenced by any Instrument (other than bank checks and like
instruments received in the ordinary course of business) in a principal face
amount in excess of $250,000 individually and $1,000,000 (taken together with
other such Instruments) in the aggregate that has not been delivered to the
Administrative Agent, properly endorsed for transfer, to the extent delivery is
required by Section 4.4 (Pledged Collateral). If any amount payable under or in
connection with any of the Pledged Collateral is evidenced by Chattel Paper,
such Chattel Paper is in the possession of the Grantors.

Section 3.7 Intellectual Property

(a)     Part A of Schedule 5 (Intellectual Property) lists all Material
Intellectual Property of such Grantor on the date hereof and Part B of
Schedule 5 (Intellectual Property) lists all other Intellectual Property of such
Grantor on the date hereof, in each case separately identifying that owned by
such Grantor and that licensed by or to such Grantor and other than commercial
off the shelf software licenses and trade secrets. The Material Intellectual
Property set forth on Schedule 5 (Intellectual Property) for such Grantor
constitutes all of the intellectual property rights (other than commercial off
the shelf software licenses and trade secrets) necessary to conduct its business
as currently and as proposed to be conducted.

(b)     All Material Intellectual Property owned by such Grantor is valid, in
full force and effect, subsisting, unexpired and enforceable, has not been
adjudged invalid and has not been abandoned, and to the Grantor’s knowledge, the
use thereof in the business of such Grantor does not infringe, misappropriate,
dilute or violate the intellectual property rights of any other Person.

(c)     Except as set forth in Schedule 5 (Intellectual Property), none of the
Material Intellectual Property (other than commercial off the shelf software
licenses) owned by such Grantor is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.

(d)     No holding, decision or judgment has been rendered by any Governmental
Authority that would limit, cancel or question the validity of, or such
Grantor’s rights in, any Material Intellectual Property.

(e)     Except as set forth in Schedule 5A (Intellectual Property Matters), no
action or proceeding seeking to limit, cancel or question the validity of any
Material Intellectual Property owned by such Grantor or such Grantor’s ownership
interest therein is pending or, to the knowledge of such Grantor, threatened.
There are no claims, judgments or settlements to be paid by such Grantor
relating to the Material Intellectual Property.

Section 3.8 Deposit Accounts; Securities Accounts

        The only Deposit Accounts or Securities Accounts maintained by any
Grantor on the date hereof are those listed on Schedule 6 (Deposit Accounts;
Securities Accounts), which sets forth such information separately for each
Grantor.

Section 3.9 Commercial Tort Claims

        The only Commercial Tort Claims of any Grantor existing on the date
hereof and known to the Grantors (regardless of whether the amount, defendant or
other material facts can be determined and regardless of whether such Commercial
Tort Claim has been asserted, threatened or has otherwise been made known to the
obligee thereof or whether litigation has been commenced for such claims), if
any, are those listed on Schedule 7 (Commercial Tort Claims), which sets forth
such information separately for each Grantor.

ARTICLE IV  COVENANTS

        Each Grantor agrees with the Administrative Agent to the following, as
long as any Obligation or Commitment remains outstanding and, in each case,
unless the Requisite Lenders otherwise consent in writing:

Section 4.1 Generally

        Such Grantor shall (a) except for the security interest created by this
Agreement, not create or suffer to exist any Lien upon or with respect to any
Collateral, except Permitted Liens, (b) not knowingly use or permit any
Collateral to be used unlawfully or in violation of any provision of this
Agreement, any other Loan Document, or any policy of insurance covering any
material portion or amount of the Collateral, (c) not sell, transfer or assign
(by operation of law or otherwise) any Collateral if such sale, transfer or
assignment would be prohibited under the Credit Agreement, (d) not enter into
any agreement or undertaking restricting the right or ability of such Grantor or
the Administrative Agent to sell, assign or transfer any Collateral if such
restriction would have a Material Adverse Effect and (e) promptly notify the
Administrative Agent of its entry into any agreement or assumption of
undertaking that restricts the ability to sell, assign or transfer any material
portion or amount of Collateral regardless of whether or not it has a Material
Adverse Effect.

Section 4.2 Maintenance of Perfected Security Interest; Further Documentation

(a)     Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in Section 3.2 (Perfection and Priority) and shall defend such
security interest of such priority against the claims and demands of all
Persons.

(b)     Such Grantor shall furnish to the Administrative Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Administrative Agent
may reasonably request, all in reasonable detail and in form and substance
satisfactory to the Administrative Agent.

(c)     At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor
shall promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further action as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including the filing of any financing or continuation statement under the UCC
(or other similar laws, including with respect to the Australian Intellectual
Property or with respect to the Canadian Collateral, personal property security
legislation and other laws of Australia or Canada, respectively) in effect in
any jurisdiction with respect to the security interest created hereby, the
execution and delivery of Deposit Account Control Agreements and Control Account
Agreements and the execution and delivery of additional foreign charges, pledge
agreements, security agreements and other Collateral Documents as may reasonably
be requested by the Administrative Agent to perfect its Lien on the Stock or
Stock Equivalents owned by such Grantor in its Foreign Subsidiaries under the
laws of the jurisdiction of organization of any Foreign Subsidiary organized
under the laws of Australia, Canada, Mexico, the United Kingdom, Luxembourg, or
such other jurisdictions as may be reasonably required by the Administrative
Agent.

Section 4.3 Changes in Locations, Name, Etc.

(a) Except upon 15 days’ prior written notice to the Administrative Agent and
delivery to the Administrative Agent of (i) all additional financing statements
and other documents reasonably requested by the Administrative Agent to maintain
the validity, perfection and priority of the security interests provided for
herein and (ii) if applicable, a written supplement to Schedule 4 (Location of
Inventory and Equipment) showing (A) any additional locations at which Inventory
or Equipment shall be kept or (B) any changes in any location where Inventory or
Equipment shall be kept that would require the Administrative Agent to take any
action to maintain a perfected security interest in such Collateral, such
Grantor shall not do any of the following:

(i) permit any Inventory or Equipment having a Fair Market Value in excess of
$1,000,000 in the aggregate to be kept at a location other than those listed on
Schedule 4 (Location of Inventory and Equipment), except for Inventory or
Equipment in transit, Inventory or Equipment subject to Tooling Arrangements,
and Inventory or Equipment used for evaluation and demonstration purposes;

(ii) change its jurisdiction of organization or the location of its chief
executive office, in each case from that referred to in Section 3.3
(Jurisdiction of Organization; Chief Executive Office); or

(iii) change its name, identity or corporate structure to such an extent that
any financing statement filed in connection with this Agreement would become
misleading.

(b) Such Grantor shall keep and maintain at its own cost and expense
satisfactory and complete records of the Collateral, including a record of all
payments received and all credits granted with respect to the Collateral and all
other dealings with the Collateral. If requested by the Administrative Agent,
the security interest of the Administrative Agent shall be noted on the
certificate of title of each Vehicle; provided that the Grantors shall not be
required to note the security interest of the Administrative Agent on the
certificate of title for any Vehicle having a book value of less than $30,000.

Section 4.4 Pledged Collateral

(a)     Such Grantor shall (i) deliver to the Administrative Agent, all
certificates and Instruments and other documents representing or evidencing any
Pledged Collateral (including such certificates representing or evidencing the
Pledged Stock of a Grantor in its foreign Subsidiaries required to be pledged
hereunder and Additional Pledged Collateral), whether now existing or hereafter
acquired, in suitable form for transfer by delivery or, as applicable,
accompanied by such Grantor’s endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Administrative Agent, together, in respect of any Additional
Pledged Collateral, with a Pledge Amendment, duly executed by the Grantor, in
substantially the form of Annex 3 (Form of Pledge Amendment), an acknowledgment
and agreement to a Joinder Agreement duly executed by the Grantor, in
substantially the form in the form of Annex 4 (Form of Joinder Agreement), or
such other documentation acceptable to the Administrative Agent and
(ii) maintain all other Pledged Collateral constituting Investment Property in a
Control Account. Such Grantor authorizes the Administrative Agent to attach each
Pledge Amendment to this Agreement. The Administrative Agent shall have the
right, at any time in its discretion and without notice to the Grantor, to
transfer to or to register in its name or in the name of its nominees any
Pledged Collateral. The Administrative Agent shall have the right at any time to
exchange any certificate or instrument representing or evidencing any Pledged
Collateral for certificates or instruments of smaller or larger denominations.
Notwithstanding the foregoing, the Grantors shall not be required to deliver to
the Administrative Agent any Instrument having a principal face amount of less
than $250,000 individually and $1,000,000 in the aggregate (taken together with
other such Instruments).

(b)     Except as provided in Article V (Remedial Provisions), such Grantor
shall be entitled to receive all cash dividends paid in respect of the Pledged
Collateral (other than liquidating or distributing dividends) with respect to
the Pledged Collateral. Any sums paid upon or in respect of any Pledged
Collateral upon the liquidation or dissolution of any issuer of any Pledged
Collateral, any distribution of capital made on or in respect of any Pledged
Collateral or any property distributed upon or with respect to any Pledged
Collateral pursuant to the recapitalization or reclassification of the capital
of any issuer of Pledged Collateral or pursuant to the reorganization thereof
shall, unless otherwise subject to a perfected security interest in favor of the
Administrative Agent, be delivered to the Administrative Agent to be held by it
hereunder as additional collateral security for the Secured Obligations. If any
sum of money or property so paid or distributed in respect of any Pledged
Collateral shall be received by such Grantor, such Grantor shall, until such
money or property is paid or delivered to the Administrative Agent, hold such
money or property in trust for the Administrative Agent, segregated from other
funds of such Grantor, as additional security for the Secured Obligations.

(c)     Except as provided in Article V (Remedial Provisions), such Grantor
shall be entitled to exercise all voting, consent and corporate, partnership,
limited liability company and similar rights with respect to the Pledged
Collateral; provided, however, that no vote shall be cast, consent given or
right exercised or other action taken by such Grantor that would impair the
Collateral, be inconsistent with or result in any violation of any provision of
the Credit Agreement, this Agreement or any other Loan Document or, without
prior notice to the Administrative Agent, enable or permit any issuer of Pledged
Collateral to issue any Stock or other equity Securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any Stock or other equity Securities of any nature of any issuer of
Pledged Collateral.

(d)     Such Grantor shall not grant control over any Investment Property to any
Person other than the Administrative Agent.

(e)     In the case of each Grantor that is an issuer of Pledged Collateral,
such Grantor agrees to be bound by the terms of this Agreement relating to the
Pledged Collateral issued by it and shall comply with such terms insofar as such
terms are applicable to it. In the case of any Grantor that is a holder of any
Stock or Stock Equivalent in any Person that is an issuer of Pledged Collateral,
such Grantor consents to (i) the exercise of the rights granted to the
Administrative Agent hereunder (including those described in Section 5.3
(Pledged Collateral)), and (ii) the pledge by each other Grantor, pursuant to
the terms hereof, of the Pledged Stock in such Person and to the transfer of
such Pledged Stock to the Administrative Agent or its nominee and to the
substitution of the Administrative Agent or its nominee as a holder of such
Pledged Stock with all the rights, powers and duties of other holders of Pledged
Stock of the same class and, if the Grantor having pledged such Pledged Stock
hereunder had any right, power or duty at the time of such pledge or at the time
of such substitution beyond that of such other holders, with all such additional
rights, powers and duties. Such Grantor agrees to execute and deliver to the
Administrative Agent such certificates, agreements and other documents as may be
reasonably necessary to evidence, formalize or otherwise give effect to the
consents given in this clause (e).

(f)     Such Grantor shall not, without the consent of the Agents, agree to any
amendment of any Constituent Document that in any way adversely affects the
perfection of the security interest of the Administrative Agent in the Pledged
Collateral pledged by such Grantor hereunder, including any amendment electing
to treat any membership interest or partnership interest that is part of the
Pledged Collateral as a security under Section 8-103 of the UCC, or any election
to turn any previously uncertificated Stock that is part of the Pledged
Collateral into certificated Stock, unless such treatment or election would
adversely affect the perfection of the Administrative Agent’s security interest
in such Pledged Collateral.

Section 4.5 Control Accounts; Approved Deposit Accounts

(a) (i) No Grantor shall establish or maintain any Concentration Account that is
not subject to a first priority perfected security interest in favor of the
Administrative Agent for the benefit of the Secured Parties (subject only to
Permitted Liens). On the Closing Date (or such later date as may be agreed to by
the Administrative Agent), each Grantor shall have delivered to the
Administrative Agent a Deposit Account Control Agreement with respect to each
Concentration Account, in form and substance satisfactory to the Administrative
Agent.

(ii) Notwithstanding anything in the foregoing clause (i) to the contrary, to
the extent that that a Deposit Account Control Agreement with respect to each
Concentration Account existing on the Closing Date that was established prior to
the Closing Date shall not have been delivered to the Administrative Agent on
the Closing Date, the Grantors shall either (i) within 30 days after the Closing
Date cause the applicable Deposit Account Bank with which such Concentration
Account is maintained to enter into a Deposit Account Control Agreement
sufficient to perfect the Administrative Agent’s security interest in such
Concentration Account and all deposits therein or (ii) within 60 days after the
Closing Date, close such Concentration Account; provided, however, if such
Concentration Account is an account to which any Grantor’s customers have been
instructed to make payments (or an account associated with an address to which
any Grantor’s customers have been instructed to make payments), and within 60
days after the date of this Agreement such customers shall have been instructed
to make payments thereafter to a new Concentration Account that is subject to a
Deposit Account Control Agreement, then the 60 day period referred to in this
clause (ii) shall be extended to 90 days after the Closing Date.

(b) (i) No Grantor shall establish or maintain any Securities Account that is
not subject to a first priority perfected security interest in favor of the
Administrative Agent for the benefit of the Secured Parties (subject only to
Permitted Liens), which security interest shall be perfected by “control” within
the meaning of Sections 8-106 and 9-106 of the UCC. On the Closing Date (or such
later date as may be agreed to by the Administrative Agent), each Grantor shall
have delivered to the Administrative Agent a Control Account Agreement with
respect to each Securities Account, in form and substance satisfactory to the
Administrative Agent.

(ii) Notwithstanding anything in the foregoing clause (i) to the contrary, to
the extent that that a Control Account Agreement with respect to each Securities
Account existing on the Closing Date that was established prior to the Closing
Date shall not have been delivered to the Administrative Agent on the Closing
Date, the Grantors shall either (i) within 30 days after the Closing Date cause
the Securities Intermediary with which such Securities Account is maintained to
enter into a Control Account Agreement sufficient to perfect the Administrative
Agent’s security interest in such Securities Account and any Financial Assets
credit to such Securities Account by “control” within the meaning of Sections
8-106 and 9-106 of the UCC, or (ii) within 60 days after the date of this
Agreement close such Securities Account.

(c) No Grantor shall permit the amount of cash or Cash Equivalents held by the
Grantors that is not maintained in a Concentration Account, a Cash Collateral
Account, or a Securities Account with respect to which the Administrative Agent
for the benefit of the Secured Parties has a first priority perfected Lien to
exceed in the aggregate $1,000,000 for any period of more than five consecutive
Business Days; provided, however, that the Grantors shall use commercially
reasonable efforts to prevent the amount of cash and Cash Equivalents held by
the Grantors and not maintained in a Concentration Account, a Cash Collateral
Account or a Securities Account from exceeding such $1,000,000 limit.

(d) Notwithstanding the foregoing provisions of this Section 4.5 (Control
Accounts; Approved Deposit Accounts), or the provisions of any other provision
of this Agreement or any other Loan Document, the Grantors shall be entitled to
maintain Qualified Hedging Contract Accounts which shall not be subject to any
security interest in favor of the Administrative Agent and with respect to which
the Grantors shall not be required to obtain Deposit Account Control Agreements
or Control Account Agreements.

(e) The Administrative Agent agrees with each Grantor that the Administrative
Agent shall not give any notice of sole control, notice of exclusive control,
blocked account notice, blockage notice, notice of termination of withdrawal
rights or similar notice, instruction, direction, order or request to any
Deposit Account Bank under any Deposit Account Control Agreement or otherwise,
or any Securities Intermediary under any Control Account Agreement or otherwise,
unless an Event of Default has occurred and is continuing.

(f) Unless an Event of Default has occurred and is continuing, the Grantors
shall be entitled to use, deal with, make deposits to and make withdrawals from,
and otherwise direct the disposition of funds in any deposit account that is
subject to a Deposit Account Control Agreement or otherwise, and to use, deal
with, make deposits to and make withdrawals from, give entitlement orders with
respect to, and make dispositions from any securities account that is subject to
an Account Control Agreement or otherwise.

(g) The Administrative Agent agrees with each Grantor that unless an Event of
Default has occurred and is continuing, the Administrative Agent shall not
request from any Deposit Account Bank under any Deposit Account Control
Agreement or any Securities Intermediary under any Control Account Agreement any
account statements, statements of cash balances, reports, or other information
relating to any deposit account or securities account other than copies of such
account statements, statements of cash balances, reports or other information
that are ordinarily provided by the Deposit Account Bank or the Securities
Intermediary to the applicable Grantor; provided, that nothing in this clause
(f) shall prohibit, or be deemed to prohibit, the Administrative Agent from
requesting any such documents, reports or other information from the applicable
Grantor.

Section 4.6 Accounts

(a)     Such Grantor shall not, other than in the ordinary course of business
consistent with its past practice, (i) grant any extension of the time of
payment of any Account, (ii) compromise or settle any Account for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable for
the payment of any Account, (iv) allow any credit or discount on any Account or
(v) amend, supplement or modify any Account in any manner that could adversely
affect the value thereof.

(b)     The Administrative Agent shall have the right to make test verifications
of the Accounts in any manner and through any medium that it reasonably
considers advisable, and such Grantor shall furnish all such assistance and
information as the Administrative Agent may reasonably require in connection
therewith. Upon the Administrative Agent’s request during the continuance of an
Event of Default, such Grantor shall, at such Grantor’s expense, cause
independent public accountants or others satisfactory to the Administrative
Agent to furnish to the Administrative Agent reports showing reconciliations,
aging and test verifications of, and trial balances for, the Accounts.

Section 4.7 Delivery of Instruments and Chattel Paper

(a)     If any amount in excess of $250,000 individually or $1,000,000 in the
aggregate (taken together with other such Collateral) payable under or in
connection with any Collateral owned by such Grantor shall be or become
evidenced by an Instrument, such Grantor shall immediately deliver such
Instrument to the Administrative Agent, duly indorsed in a manner satisfactory
to the Administrative Agent, or, if consented to by the Administrative Agent,
shall mark all such Instruments with the following legend: “This writing and the
obligations evidenced or secured hereby are subject to the security interest of
Citicorp North America, Inc., as Administrative Agent”.

(b)     If any amount payable under or in connection with any Collateral owned
by the Grantors shall be or become evidenced by Chattel Paper, the Grantors
shall keep such Chattel Paper in the Grantors’ possession or shall deliver such
Chattel Paper to the Administrative Agent.

Section 4.8 Intellectual Property

(a)     Such Grantor (either itself or through licensees) shall (i) continue to
use each Trademark that is Material Intellectual Property in order to maintain
such Trademark in full force and effect with respect to each class of goods for
which such Trademark is currently used, free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by applicable
Requirements of Law, (iv) not adopt or use any mark that is confusingly similar
or a colorable imitation of such Trademark unless the Administrative Agent shall
obtain a perfected security interest in such mark pursuant to this Agreement and
(v) not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark (or any goodwill associated
therewith) may become destroyed, invalidated, impaired or harmed in any way.

(b)     Such Grantor (either itself or through licensees) shall not do any act,
or omit to do any act, whereby any Patent that is Material Intellectual Property
may become forfeited, abandoned or dedicated to the public.

(c)     Such Grantor (either itself or through licensees) (i) shall not (and
shall not permit any licensee or sublicensee thereof to) do any act or omit to
do any act whereby any portion of the Copyrights that is Material Intellectual
Property may become invalidated or otherwise impaired and (ii) shall not (either
itself or through licensees) do any act whereby any portion of the Copyrights
that is Material Intellectual Property may fall into the public domain.

(d)     Such Grantor (either itself or through licensees) shall not do any act,
or omit to do any act, whereby any trade secret that is Material Intellectual
Property may become publicly available or otherwise unprotectable.

(e)     Such Grantor (either itself or through licensees) shall not do any act
that knowingly uses any Material Intellectual Property to infringe,
misappropriate, dilute or violate the intellectual property rights of any other
Person.

(f)     Such Grantor shall notify the Administrative Agent immediately if it
knows that any application or registration relating to any Material Intellectual
Property is reasonably likely to become forfeited, abandoned or dedicated to the
public, or of any material adverse determination or development (including the
institution of, or any such material adverse determination or development in,
any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office, the Canadian Intellectual Property Office, IP Australia
or any court or tribunal in any country, as applicable) regarding such Grantor’s
ownership of, right to use, interest in, or the validity of, any Material
Intellectual Property or such Grantor’s right to register the same or to own and
maintain the same.

(g)     Whenever such Grantor, either by itself or through any agent, licensee
or designee, shall file an application for the registration of any Intellectual
Property with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency within or outside the United
States or register any Internet domain name, such Grantor shall report such
filing to the Administrative Agent on each date on which the Borrower is
required to deliver to the Administrative Agent the Financial Statements
required pursuant to Section 6.1(b) (Financial Statements) of the Credit
Agreement (or, in the case of any Fiscal Quarter ending on or about December 31,
within 45 days after the last day of such Fiscal Quarter), which report shall
include a list of all filings made by such Grantor since the date of delivery of
the immediately preceding report (it being understood that the first such report
delivered to the Administrative Agent shall include all such filings from and
after the Closing Date through the date of such delivery). Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
all agreements, instruments, documents and papers as the Administrative Agent
may reasonably request to evidence the Administrative Agent’s security interest
in any Copyright, Patent, Trademark or Internet domain name and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby.

(h)     Such Grantor shall take all reasonable actions necessary or requested by
the Administrative Agent, including in any proceeding before (i) in the case of
Intellectual Property other than Australian Intellectual Property and Canadian
Intellectual Property, the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency, (ii) in the case of
Australian Intellectual Property, IP Australia or any similar office or agency,
and (iii) in the case of Canadian Intellectual Property, the Canadian
Intellectual Property Office or any similar office or agency, or any court or
tribunal in Canada, and in each case, before any Internet domain name registrar,
to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of any Copyright, Trademark,
Patent or Internet domain name that is Material Intellectual Property, including
filing of applications for renewal, affidavits of use, affidavits of
incontestability and opposition and interference and cancellation proceedings.

(i)     In the event that Grantor has knowledge, or a reasonable belief after
consultation with intellectual property counsel, that any Material Intellectual
Property has been misappropriated or diluted by a third party, or any such
Intellectual Property is or has been infringed upon, such Grantor shall notify
the Administrative Agent promptly after such Grantor learns thereof. Such
Grantor shall take appropriate action in response to such infringement,
misappropriation or dilution, including (if such Grantor determines that such
action is appropriate in its reasonable business judgment or such action is
reasonably requested by the Administrative Agent) promptly bringing suit for
infringement, misappropriation or dilution and to recover all damages for such
infringement, misappropriation of dilution, and shall take such other actions
may be appropriate in its reasonable judgment under the circumstances to protect
such Material Intellectual Property.

(j)     Unless otherwise agreed to by the Administrative Agent, such Grantor
shall execute and deliver to the Administrative Agent for filing in (i) the
United States Copyright Office, IP Australia and the Canadian Intellectual
Property Office, a short-form copyright security agreement in the form attached
hereto as Annex 5 (Form of Short Form Copyright Security Agreement), (ii) in the
United States Patent and Trademark Office and with the Secretary of State of all
appropriate States of the United States, IP Australia and the Canadian
Intellectual Property Office, a short-form patent security agreement in the form
attached hereto as Annex 6 (Form of Short Form Patent Security Agreement),
(iii) the United States Patent and Trademark Office, IP Australia and the
Canadian Intellectual Property Office, a short-form trademark security agreement
in form attached hereto as Annex 7 (Form of Short Form Trademark Security
Agreement) and (iv) with respect to any Internet domain name that is Material
Intellectual Property, with the appropriate Internet domain name registrar, a
duly executed form of assignment of such Internet domain name to the
Administrative Agent (together with appropriate supporting documentation as may
be requested by the Administrative Agent) in form and substance reasonably
acceptable to the Administrative Agent. In the case of clause (iv) above, each
Grantor agrees to perform all appropriate actions (including, without
limitation, the completion and filing, or delivery to the Administrative Agent
for filing, of such assignment) deemed necessary by the Administrative Agent for
the Administrative Agent to ensure such Internet domain name that constitutes
Material Intellectual Property is registered in the name of the Administrative
Agent.

Section 4.9 Vehicles

        Upon the written request of the Administrative Agent, within 45 days
after the date of such request and, with respect to any Vehicle acquired by such
Grantor subsequent to the date of any such request, within 45 days after the
date of acquisition thereof, such Grantor shall file all applications for
certificates of title or ownership indicating the Administrative Agent’s
security interest in the Vehicle covered by such certificate and any other
necessary documentation, in each office in each jurisdiction that the
Administrative Agent shall deem advisable to perfect its security interests in
the Vehicles; provided that the Grantors shall not be required to file any such
applications or other documentation for any Vehicle having a book value of less
than $30,000.

Section 4.10 Payment of Obligations

        Such Grantor shall pay and discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all taxes,
assessments and governmental charges or levies imposed upon the Collateral or in
respect of income or profits therefrom, as well as all claims of any kind
(including claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion of
the Collateral or any interest therein.

Section 4.11 Notice of Commercial Tort Claims

        Such Grantor agrees that, if it shall acquire any interest in any
Commercial Tort Claim (whether from another Person or because such Commercial
Tort Claim shall have come into existence), in an amount in excess of
$1,000,000, (i) such Grantor shall, immediately upon such acquisition, deliver
to the Administrative Agent, in each case in form and substance satisfactory to
the Administrative Agent, a notice of the existence and nature of such
Commercial Tort Claim and deliver a supplement to Schedule 7 (Commercial Tort
Claims) containing a specific description of such Commercial Tort Claim,
(ii) the provision of Section 2.1 (Collateral) shall apply to such Commercial
Tort Claim and (iii) such Grantor shall execute and deliver to the
Administrative Agent, in each case in form and substance satisfactory to the
Administrative Agent, any certificate, agreement and other document, and take
all other action, deemed by the Administrative Agent to be reasonably necessary
or appropriate for the Administrative Agent to obtain, on behalf of the Lenders,
a first-priority, perfected security interest in all such Commercial Tort
Claims. Any supplement to Schedule 7 (Commercial Tort Claims) delivered pursuant
to this Section 4.11 (Notice of Commercial Tort Claims) shall, after the receipt
thereof by the Administrative Agent, become part of Schedule 7 (Commercial Tort
Claims) for all purposes hereunder other than in respect of representations and
warranties made prior to the date of such receipt. No Grantor shall be deemed to
hold or to have acquired any Commercial Tort Claim unless and until such Grantor
shall have filed such Commercial Tort Claim in a court or tribunal having
jurisdiction over such Commercial Tort Claim.

Section 4.12 Acknowledgement of Security Interest

        The Grantors and the Administrative Agent acknowledge and agree that
this Agreement is intended to grant to the Administrative Agent for the benefit
of the Secured Parties a security interest in the Collateral and shall not
constitute a present assignment of any of the Collateral.

ARTICLE V  REMEDIAL PROVISIONS

Section 5.1 Code and Other Remedies

(a)     During the continuance of an Event of Default, the Administrative Agent
may exercise, in addition to all other rights and remedies granted to it in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
under the UCC or any other applicable Requirements of Law (including, with
respect to the Australian Intellectual Property or with respect to the Canadian
Collateral, personal property security legislations and other laws of Australia
or Canada as the case may be). Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in during the continuation of an Event of Default forthwith
collect, receive, appropriate and realize upon any Collateral, and may forthwith
sell, lease, assign, give option or options to purchase, or otherwise dispose of
and deliver any Collateral (or contract to do any of the foregoing), in one or
more parcels at public or private sale or sales, at any exchange, broker’s board
or office of the Administrative Agent or any Lender or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in any Grantor, which right or equity is hereby waived
and released. Each Grantor further agrees, at the Administrative Agent’s
request, to assemble the Collateral and make it available to the Administrative
Agent at places that the Administrative Agent shall reasonably select, whether
at such Grantor’s premises or elsewhere. The Administrative Agent shall apply
the net proceeds of any action taken by it pursuant to this Section 5.1, after
deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any Collateral or in any
way relating to the Collateral or the rights of the Administrative Agent and any
other Secured Party hereunder, including reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Secured Obligations, in
such order as the Credit Agreement shall prescribe, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, need the Administrative Agent account
for the surplus, if any, to any Grantor. To the extent permitted by applicable
law, each Grantor waives all claims, damages and demands it may acquire against
the Administrative Agent or any other Secured Party arising out of the exercise
by them of any rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition.

(b)     During the occurrence and continuance of an Event of Default, the
Administrative Agent may appoint or reappoint by instrument in writing, any
Person or Persons, whether an officer or officers or an employee or employees of
the Administrative Agent or not, to be an interim receiver, receiver or
receivers (hereinafter called a “Receiver”) of the Canadian Collateral
(including any interest, income or profits therefrom) and may remove any
Receiver so appointed and appoint another in such Person’s stead. Any such
Receiver shall, so far as concerns responsibility for such Person’s acts, be
deemed the agent of Grantors and not of the Administrative Agent or any of the
Secured Parties, and neither the Administrative Agent nor any of the Secured
Parties shall be in any way responsible for any misconduct, negligence or
non-feasance on the part of any such Receiver or such Person’s servants, agents,
officers or employees. The Receiver may exercise any or all of the powers and
rights given to the Administrative Agent under this Article V (Remedial
Provisions).

Section 5.2 Accounts and Payments in Respect of General Intangibles

(a)     In addition to, and not in substitution for, any similar requirement in
the Credit Agreement, if required by the Administrative Agent at any time during
the continuance of an Event of Default, any payment of Accounts or payment in
respect of General Intangibles, when collected by any Grantor, shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent, in an Approved Deposit Account or a Cash Collateral
Account, subject to withdrawal by the Administrative Agent as provided in
Section 5.4 (Proceeds to be Turned Over To Administrative Agent). Until so
turned over or turned over, such payment shall be held by such Grantor in trust
for the Administrative Agent, segregated from other funds of such Grantor. Each
such deposit of Proceeds of Accounts and payments in respect of General
Intangibles shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.

(b)     At the Administrative Agent’s request, during the continuance of an
Event of Default, each Grantor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions that gave rise to the Accounts or payments in respect of General
Intangibles, including all original orders, invoices and shipping receipts.

(c)     The Administrative Agent may, without notice, at any time during the
continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its Accounts or amounts due under General Intangibles or any
thereof.

(d)     The Administrative Agent in its own name or in the name of others may at
any time during the continuance of an Event of Default communicate with Account
Debtors to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of any Account or amounts due under any General
Intangible.

(e)     Upon the request of the Administrative Agent at any time during the
continuance of an Event of Default, each Grantor shall notify Account Debtors
that the Accounts or General Intangibles have been collaterally assigned to the
Administrative Agent and that payments in respect thereof shall be made directly
to the Administrative Agent. In addition, the Administrative Agent may at any
time during the continuance of an Event of Default enforce such Grantor’s rights
against such Account Debtors and obligors of General Intangibles.

(f)     Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Accounts and payments in respect of General
Intangibles to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. Neither the Administrative Agent nor any other
Secured Party shall have any obligation or liability under any agreement giving
rise to an Account or a payment in respect of a General Intangible by reason of
or arising out of this Agreement or the receipt by the Administrative Agent nor
any other Secured Party of any payment relating thereto, nor shall the
Administrative Agent nor any other Secured Party be obligated in any manner to
perform any obligation of any Grantor under or pursuant to any agreement giving
rise to an Account or a payment in respect of a General Intangible, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts that may have been assigned
to it or to which it may be entitled at any time or times.

Section 5.3 Pledged Collateral

(a)     During the continuance of an Event of Default, upon notice by the
Administrative Agent to the relevant Grantor or Grantors, (i) the Administrative
Agent shall have the right to receive any Proceeds of the Pledged Collateral and
make application thereof to the Obligations in the order set forth in the Credit
Agreement and (ii) the Administrative Agent or its nominee may exercise (A) any
voting, consent, corporate and other right pertaining to the Pledged Collateral
at any meeting of shareholders, partners or members, as the case may be, of the
relevant issuer or issuers of Pledged Collateral or otherwise and (B) any right
of conversion, exchange and subscription and any other right, privilege or
option pertaining to the Pledged Collateral as if it were the absolute owner
thereof (including the right to exchange at its discretion any of the Pledged
Collateral upon the merger, amalgamation, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
issuer of Pledged Stock, the right to deposit and deliver any Pledged Collateral
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Administrative Agent may
determine), all without liability except to account for property actually
received by it; provided, however, that the Administrative Agent shall have no
duty to any Grantor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.

(b)     In order to permit the Administrative Agent to exercise the voting and
other consensual rights that it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions that it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Administrative Agent all such proxies,
dividend payment orders and other instruments as the Administrative Agent may
from time to time reasonably request and (ii) without limiting the effect of
clause (i) above, such Grantor hereby grants to the Administrative Agent an
irrevocable proxy to vote all or any part of the Pledged Collateral and to
exercise all other rights, powers, privileges and remedies to which a holder of
the Pledged Collateral would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case may
be, and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any Pledged
Collateral on the record books of the issuer thereof) by any other person
(including the issuer of such Pledged Collateral or any officer or agent
thereof) during the continuance of an Event of Default and which proxy shall
only terminate upon the payment in full of the Secured Obligations.

(c)     Each Grantor hereby expressly authorizes and instructs each issuer of
any Pledged Collateral pledged hereunder by such Grantor to (i) comply with any
instruction received by it from the Administrative Agent in writing that
(A) states that an Event of Default has occurred and is continuing and (B) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that such issuer
shall be fully protected in so complying and (ii) unless otherwise expressly
permitted hereby, pay any dividend or other payment with respect to the Pledged
Collateral directly to the Administrative Agent

Section 5.4 Proceeds to be Turned Over To Administrative Agent

        Unless otherwise expressly provided in the Credit Agreement, all
Proceeds received by the Administrative Agent hereunder in cash or Cash
Equivalents shall be held by the Administrative Agent in a Cash Collateral
Account. All Proceeds while held by the Administrative Agent in a Cash
Collateral Account (or by such Grantor in trust for the Administrative Agent)
shall continue to be held as collateral security for the Secured Obligations and
shall not constitute payment thereof until applied as provided in the Credit
Agreement. Unless an Event of Default has occurred and is continuing or the
release thereof would constitute an Event of Default, all Proceeds held by the
Administrative Agent shall be released to the Grantors immediately upon request.

Section 5.5 Sale of Collateral

(a)     Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any Pledged Collateral by reason of certain prohibitions
contained in the Securities Act or, with respect to Canadian Pledged Stock, the
applicable Requirements of Law in Canada (the “Canadian Securities Laws”) and
applicable state securities laws or otherwise or may determine that a public
sale is impracticable or not commercially reasonable and, accordingly, may
resort to one or more private sales thereof to a restricted group of purchasers
that shall be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale of
any Pledged Collateral for the period of time necessary to permit the issuer
thereof to register such securities for public sale under the Securities Act or
the Canadian Securities Laws, or under applicable state securities laws, even if
such issuer would agree to do so.

(b)     Each Grantor agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Collateral pursuant to this Section 5.5 valid and binding
and in compliance with all other applicable Requirements of Law. Each Grantor
further agrees that a breach of any covenant contained in this Section 5.5 will
cause irreparable injury to the Administrative Agent and other Secured Parties,
that the Administrative Agent and the other Secured Parties have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 5.5 shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defense against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred under the Credit Agreement.

Section 5.6 Deficiency

        Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay the
Secured Obligations and the fees and disbursements of any attorney employed by
the Administrative Agent or any other Secured Party to collect such deficiency.

ARTICLE VI  THE ADMINISTRATIVE AGENT

Section 6.1 Administrative Agent’s Appointment as Attorney-in-Fact

(a) Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any appropriate action and to execute any document or instrument that may be
necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any of the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession
of and indorse and collect any check, draft, note, acceptance or other
instrument for the payment of moneys due under any Account or General Intangible
or with respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any such
moneys due under any Account or General Intangible or with respect to any other
Collateral whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any agreement, instrument, document or paper as the Administrative
Agent may request to evidence the Administrative Agent’s security interest in
such Intellectual Property and the goodwill and General Intangibles of such
Grantor relating thereto or represented thereby;

(iii) pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral, effect any repair or pay any insurance called for by the terms
of this Agreement (including all or any part of the premiums therefor and the
costs thereof);

(iv) execute, in connection with any sale provided for in Section 5.1 (Code and
Other Remedies) or Section 5.5 (Sale of Collateral), any endorsement, assignment
or other instrument of conveyance or transfer with respect to the Collateral; or

(v) (A) direct any party liable for any payment under any Collateral to make
payment of any moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct, (B) ask or
demand for, collect, and receive payment of and receipt for, any moneys, claims
and other amounts due or to become due at any time in respect of or arising out
of any Collateral, (C) sign and indorse any invoice, freight or express bill,
bill of lading, storage or warehouse receipt, draft against debtors, assignment,
verification, notice and other document in connection with any Collateral,
(D) commence and prosecute any suit, action or proceeding at law or in equity in
any court of competent jurisdiction to collect any Collateral and to enforce any
other right in respect of any Collateral, (E) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral,
(F) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate, (G) assign any Copyright, Patent or Trademark (along
with the goodwill of the business to which any such Trademark pertains)
throughout the world for such term or terms, on such conditions, and in such
manner as the Administrative Agent shall in its sole discretion determine,
including the execution and filing of any document necessary to effectuate or
record such assignment and (H) generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any Collateral as fully and
completely as though the Administrative Agent were the absolute owner thereof
for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things that
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent’s and the other Secured Parties’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.

Anything in this clause (a) to the contrary notwithstanding, the Administrative
Agent agrees that it shall not exercise any right under the power of attorney
provided for in this clause (a) unless an Event of Default shall be continuing,
and that if the Administrative Agent does exercise any such right under such
power of attorney, the Administrative Agent shall exercise such right in a
commercially reasonable manner to the extent required to do so by the applicable
Requirements of Law.

(b)     If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may, in a commercially reasonable manner to the extent
required to do so by the applicable Requirement of Law, perform or comply, or
otherwise cause performance or compliance, with such agreement.

(c)     The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Revolving Loans that are Base Rate Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.

(d)     Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

Section 6.2 Duty of Administrative Agent

        The Administrative Agent’s sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent, any
other Secured Party nor any of their respective officers, directors, employees
or agents shall be liable for failure to demand, collect or realize upon any
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to any
Collateral. The powers conferred on the Administrative Agent hereunder are
solely to protect the Administrative Agent’s interest in the Collateral and
shall not impose any duty upon the Administrative Agent or any other Secured
Party to exercise any such powers. The Administrative Agent and the other
Secured Parties shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
respective officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct. The Administrative Agent acknowledges and
agrees that it shall not re-pledge or otherwise create a security interest in
the Collateral, provided, that the foregoing shall not prevent or preclude, in
any respect, the Administrative Agent or any Lender from assigning its rights
under the Loan Documents in accordance with Section 11.2(f) (Assignments and
Participations) of the Credit Agreement.

Section 6.3 Authorization of Financing Statements

        Each Grantor authorizes the Administrative Agent and its Affiliates,
counsel and other representatives, at any time and from time to time, to file or
record financing statements, amendments to financing statements, and other
filing or recording documents or instruments with respect to the Collateral
without the signature of such Grantor in such form and in such offices as the
Administrative Agent reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement, and such financing
statements and amendments may described the Collateral covered thereby as “all
assets of the debtor”, “all personal property of the debtor” or words of similar
effect. Each Grantor hereby also authorizes the Administrative Agent and its
Affiliates, counsel and other representatives, at any time and from time to
time, to file continuation statements with respect to previously filed financing
statements.

Section 6.4 Authority of Administrative Agent

        Each Grantor acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any action taken by
the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the other Secured Parties, be governed by
the Credit Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Administrative Agent and
the Grantors, the Administrative Agent shall be conclusively presumed to be
acting as agent for the Administrative Agent and the other Secured Parties with
full and valid authority so to act or refrain from acting, and no Grantor shall
be under any obligation, or entitlement, to make any inquiry respecting such
authority.

ARTICLE VII  MISCELLANEOUS

Section 7.1 Amendments in Writing

        None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except in accordance with
Section 11.1 (Amendments, Waivers, Etc.) of the Credit Agreement; provided,
however, that annexes to this Agreement may be supplemented (but no existing
provisions may be modified and no Collateral may be released) through Pledge
Amendments and Joinder Agreements, in substantially the form of Annex 3 (Form of
Pledge Amendment) and Annex 4 (Form of Joinder Agreement) respectively, in each
case duly executed by the Administrative Agent and each Grantor directly
affected thereby.

Section 7.2 Notices

        All notices, requests and demands to or upon the Administrative Agent or
any Grantor hereunder shall be effected in the manner provided for in
Section 11.8 (Notices, Etc.) of the Credit Agreement; provided, however, that
any such notice, request or demand to or upon any Grantor shall be addressed in
case of the Borrower at the Borrower’s notice address set forth in such Section
11.8.

Section 7.3 No Waiver by Course of Conduct; Cumulative Remedies

        Neither the Administrative Agent nor any other Secured Party shall by
any act (except by a written instrument pursuant to Section 7.1 (Amendments in
Writing)), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that the Administrative Agent or such other Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

Section 7.4 Successors and Assigns

        This Agreement shall be binding upon the successors and assigns of each
Grantor and shall inure to the benefit of the Administrative Agent and each
other Secured Party and their successors and assigns; provided, however, that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.

Section 7.5 Counterparts

        This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), 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 agreement. Signature pages may
be detached from multiple counterparts and attached to a single counterpart so
that all signature pages are attached to the same document. Delivery of an
executed counterpart by telecopy shall be effective as delivery of a manually
executed counterpart.

Section 7.6 Severability

        Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

Section 7.7 Section Headings

        The Article and Section titles contained in this Agreement are, and
shall be, without substantive meaning or content of any kind whatsoever and are
not part of the agreement of the parties hereto.

Section 7.8 Entire Agreement

        This Agreement together with the other Loan Documents represents the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof.

Section 7.9 Governing Law

        This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.

Section 7.10 Additional Grantors

        If, pursuant to Section 7.11 (Additional Collateral and Guaranties) of
the Credit Agreement, the Borrower shall be required to cause any Subsidiary
that is not a Grantor to become a Grantor hereunder, such Subsidiary shall
execute and deliver to the Administrative Agent a Joinder Agreement
substantially in the form of Annex 4 (Form of Joinder Agreement) and shall
thereafter for all purposes be a party hereto and have the same rights, benefits
and obligations as a Grantor party hereto on the Closing Date.

Section 7.11 Release of Collateral

(a)     At the time provided in Section 10.8(b)(i) (Concerning the Collateral
and the Collateral Documents) of the Credit Agreement, the Collateral shall be
released from the Lien created hereby and this Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Administrative Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors. At the request and sole
expense of any Grantor following any such termination, the Administrative Agent
shall deliver to such Grantor any Collateral of such Grantor held by the
Administrative Agent hereunder and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.

(b)     If the Administrative Agent shall be directed or permitted pursuant to
Section 10.8(b)(ii) or (iii) (Concerning the Collateral and the Collateral
Documents) of the Credit Agreement to release any Lien created hereby upon any
Collateral (including any Collateral sold or disposed of by any Grantor in a
transaction permitted by the Credit Agreement), such Collateral shall be
released from the Lien created hereby to the extent provided under, and subject
to the terms and conditions set forth in, Section 10.8(b)(ii) or (iii)
(Concerning the Collateral and the Collateral Documents) of the Credit
Agreement. In connection therewith, the Administrative Agent, at the request and
sole expense of the Borrower, shall execute and deliver to the Borrower all
releases or other documents reasonably necessary or desirable for the release of
the Lien created hereby on such Collateral. At the request and sole expense of
the Borrower, a Grantor shall be released from its obligations hereunder in the
event that all the capital stock of such Grantor shall be so sold or disposed;
provided, however, that the Borrower shall have delivered to the Administrative
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Grantor and the terms of
the sale or other disposition in reasonable detail, including the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower in form and substance satisfactory to the Administrative Agent stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents.

Section 7.12 Reinstatement

        Each Grantor further agrees that, if any payment made by any Loan Party
or other Person and applied to the Obligations is at any time annulled, avoided,
set aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of Collateral are
required to be returned by any Secured Party to such Loan Party, its estate,
trustee, receiver or any other party, including any Grantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, any Lien or other Collateral securing
such liability shall be and remain in full force and effect, as fully as if such
payment had never been made or, if prior thereto the Lien granted hereby or
other Collateral securing such liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender), such Lien or other
Collateral shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect any Lien or other Collateral securing the obligations of any
Grantor in respect of the amount of such payment.

[SIGNATURE PAGES FOLLOW]

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        IN WITNESS WHEREOF, each of the undersigned has caused this Pledge and
Security Agreement to be duly executed and delivered as of the date first above
written.

ALARIS MEDICAL SYSTEMS, INC., as Grantor

By: /s/ Stuart E. Rickerson
——————————————
Name: Stuart E. Rickerson
Title: Vice President, General Counsel & Secretary

ALARIS RELEASE CORPORATION,
as Grantor

By: /s/ Stuart E. Rickerson
——————————————
Name: Stuart E. Rickerson
Title: Vice President, Treasurer & Secretary

ALARIS CONSENT CORPORATION,
as Grantor

By: /s/ Stuart E. Rickerson
——————————————
Name: Stuart E. Rickerson
Title: Vice President, Treasurer & Secretary

RIVER MEDICAL, INC,
as Grantor

By: /s/ David L. Schlotterbeck
——————————————
Name: David L. Schlotterbeck
Title: President & CEO

IVAC OVERSEAS HOLDINGS, INC.,
as Grantor

By: /s/ Stuart E. Rickerson
——————————————
Name: Stuart E. Rickerson
Title: Secretary

[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]

ACCEPTED AND AGREED
as of the date first above written:

CITICORP NORTH AMERICA, INC.,
as Administrative Agent

By: /s/ Myles Kassin
——————————————
Name: Myles Kassin
Title: Vice President

[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]

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TABLE OF CONTENTS

Article I DEFINED TERMS 1 
         Section 1.1 Definitions 1           Section 1.2 Certain Other Terms 8 
Article II GRANT OF SECURITY INTEREST 8 
          Section 2.1 Collateral 8            Section 2.2 Grant of Security
Interest in Collateral 9            Section 2.3 Cash Collateral Accounts 10 
Article III REPRESENTATIONS AND WARRANTIES 10 
         Section 3.1 Title; No Other Liens 10           Section 3.2 Perfection
and Priority 10           Section 3.3 Jurisdiction of Organization; Chief
Executive Office 11           Section 3.4 Inventory and Equipment 11 
         Section 3.5 Pledged Collateral 11           Section 3.6 Accounts 12 
         Section 3.7 Intellectual Property 12           Section 3.8 Deposit
Accounts; Securities Accounts 13           Section 3.9 Commercial Tort Claims
13 
Article IV COVENANTS 13 
         Section 4.1 Generally 13           Section 4.2 Maintenance of Perfected
Security Interest; Further Documentation 14           Section 4.3 Changes in
Locations, Name, Etc 14           Section 4.4 Pledged Collateral 15 
         Section 4.5 Control Accounts; Approved Deposit Accounts 16 
         Section 4.6 Accounts 18           Section 4.7 Delivery of Instruments
and Chattel Paper 19           Section 4.8 Intellectual Property 19 
         Section 4.9 Vehicles 21           Section 4.10 Payment of Obligations
21           Section 4.11 Notice of Commercial Tort Claims 22           Section
4.12 Acknowledgement of Security Interest 22 
Article V REMEDIAL PROVISIONS 22 
         Section 5.1 Code and Other Remedies 22           Section 5.2 Accounts
and Payments in Respect of General Intangibles 23           Section 5.3 Pledged
Collateral 24           Section 5.4 Proceeds to be Turned Over To Administrative
Agent 25           Section 5.5 Sale of Collateral 25           Section 5.6
Deficiency 26 
Article VI THE ADMINISTRATIVE AGENT 26 
         Section 6.1 Administrative Agent's Appointment as Attorney-in-Fact 26 
         Section 6.2 Duty of Administrative Agent 28           Section 6.3
Authorization of Financing Statements 28           Section 6.4 Authority of
Administrative Agent 29 

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Page

Article VII MISCELLANEOUS 29 
         Section 7.1 Amendments in Writing 29           Section 7.2 Notices 29 
         Section 7.3 No Waiver by Course of Conduct; Cumulative Remedies 29 
         Section 7.4 Successors and Assigns 30           Section 7.5
Counterparts 30           Section 7.6 Severability 30           Section 7.7
Section Headings 30           Section 7.8 Entire Agreement 30           Section
7.9 Governing Law 30           Section 7.10 Additional Grantors 31 
         Section 7.11 Release of Collateral 31           Section 7.12
Reinstatement 31 

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TABLE OF CONTENTS
(continued)

ANNEXES AND SCHEDULES

Annex 1   Form of Deposit Account Control Agreement   Annex 2   Form of Control
Account Agreement   Annex 3   Form of Pledge Amendment   Annex 4  Form of
Joinder Agreement  Annex 5  Form of Short Form Copyright Security Agreement 
Annex 6A  Form of Short Form Patent Security Agreement  Annex 7A  Form of Short
Form Trademark Security Agreement 
Schedule 1  Jurisdiction of Organization; Principal Executive Office  Schedule
2  Pledged Collateral  Schedule 3  Filings  Schedule 4  Location of Inventory
and Equipment  Schedule 5  Intellectual Property  Schedule 5A  Intellectual
Property Matters  Schedule 6  Deposit Accounts; Securities Accounts  Schedule 7 
Commercial Tort Claims