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Exhibit 10.2

SECURITY AGREEMENT
 
THIS SECURITY AGREEMENT (this “Agreement”), dated as of July 29, 2019, is made
by and among Foamix Pharmaceuticals Inc., a Delaware corporation (the
“Borrower”), Foamix Pharmaceuticals Ltd., an Israeli limited liability company
(the “Parent Guarantor”), certain Subsidiaries of the Parent Guarantor party
hereto or having acceded hereto pursuant to Section 22 (each a “Subsidiary
Guarantor” and, together with the Parent Guarantor, the “Guarantors”, and
together with the Borrower, each a “Grantor” and, collectively, the “Grantors”),
and PERCEPTIVE CREDIT HOLDINGS II, LP, as administrative agent for the Lenders
referred to below (in such capacity, the “Administrative Agent”).
 
WHEREAS, the Borrower, the Guarantors, certain lenders from time to time party
thereto (the “Lenders”) and the Administrative Agent are parties to a Credit
Agreement and Guaranty dated as of the date hereof (as amended, amended and
restated, modified, supplemented, renewed, extended or otherwise modified from
time to time, the “Credit Agreement”), whereby, among other things, the Borrower
will incur Indebtedness and other Obligations and the Guarantors will guarantee
such Indebtedness and other Obligations (the “Guarantee”).
 
WHEREAS, it is a condition precedent to the Borrowings under the Credit
Agreement that the Grantors enter into this Agreement and grant to the
Administrative Agent, for itself and for the ratable benefit of the other
Secured Parties, the security interests hereinafter provided to secure the
obligations of the Borrower and the Guarantors described below.
 
NOW, THEREFORE, the parties hereto agree as follows:
 
SECTION 1          Definitions; Interpretation.
 
(a)          Terms Defined in Credit Agreement.  All capitalized terms used in
this Agreement (including in the recitals hereof) and not otherwise defined
herein shall have the meanings assigned to them in the Credit Agreement.
 
(b)          Certain Defined Terms.  As used in this Agreement, the following
terms shall have the following meanings:
 
“Acceding Grantor” has the meaning set forth in Section 22.
 
“Accession Agreement” has the meaning set forth in Section 22.
 
“Books” means all books, records and other written, electronic or other
documentation in whatever form maintained now or hereafter by or for any Grantor
in connection with the ownership of its assets or the conduct of its business or
evidencing or containing information relating to the Collateral, including: 
(i) ledgers; (ii) records indicating, summarizing, or evidencing any Grantor’s
assets (including Inventory and Rights to Payment), business operations or
financial condition; (iii) computer programs and software; (iv) computer discs,
tapes, files, manuals, spreadsheets; (v) computer printouts and output of
whatever kind; (vi) any other computer prepared or electronically stored,
collected or reported information and equipment of any kind; and (vii) any and
all other rights now or hereafter arising out of any Contract between any
Grantor and any service bureau, computer or data processing company or other
Person charged with preparing or maintaining any of any Grantor’s books or
records or with credit reporting, including with regard to any such Grantor’s
Accounts.

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“Collateral” has the meaning provided in Section 2(a) hereof.
 
“Control Agreement” means any control agreement or other agreement with any
securities intermediary, bank, depository or other Person establishing the
Administrative Agent’s control with respect to any Deposit Accounts, Securities
Accounts, lockboxes, disbursement accounts, investment accounts or similar
accounts, Letter-of-Credit Rights or Investment Property, for purposes of
Article 8 or Sections 9-104, 9-106 and 9-107 of the UCC.
 
“Deposit Account” means any deposit account, as such term is defined in
Section 9-102 of the UCC, maintained by or for the benefit of any Grantor,
whether or not restricted or designated for a particular purpose.
 
“Excluded Assets” means, collectively, (a) any Excluded Account, (b) all rolling
stock, motor vehicles, vessels and other assets subject to certificates of
title, (c) all leasehold interests, (d) any lease, license, contract or
agreement to which any Grantor is a party, or any of its rights or interests
thereunder, to the extent that the grant of a security interest therein shall
constitute or result in a breach, termination, abandonment or default or
invalidity thereunder or thereof (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409
of the UCC of any relevant jurisdiction or any other applicable Law), (e) any
property or assets the grant of a security interest therein (i) is prohibited by
applicable Law or (ii) requires the consent, approval or waiver of any
Governmental Authority or any other third party (other than to the extent that
any such term would be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 of the UCC of any relevant jurisdiction or any other applicable
Law), (f) Equity Interests of any Person to the extent that (i) the Borrower or
any of its Subsidiaries holds 50% or less of the outstanding Equity Interests of
such Person and (ii) the grant of a security interest therein is prohibited by
the Organic Documents of such Person, and (g) any “intent to use” application
for registration of a Trademark filed pursuant to Section 1(b) of the Lanham
Act, 15 U.S.C. § 1051, prior to the filing of a “Statement of Use” pursuant to
Section 1(d) of the Lanham Act or an “Amendment to Allege Use” pursuant to
Section 1(c) of the Lanham Act with respect thereto, to the extent that, and
during the period in which, the grant of a security interest therein would
impair the validity or enforceability of any registration that issues from such
intent-to-use application under applicable federal law; provided that, to the
extent any asset or item of property of any Grantor that, but for this defined
term and its use herein, would otherwise constitute Collateral ceases to qualify
as an Excluded Asset, it shall automatically cease to be an “Excluded Asset” for
purposes hereof and shall be included as Collateral, unless otherwise provided
hereof.
 
“Grantors” has the meaning set forth in the preamble to this Agreement.
 
“Intellectual Property Collateral” means the following properties and assets
owned or held by any Grantor or in which any Grantor otherwise has any interest,
now existing or hereafter acquired or arising:
 
(i)           all Patents, including domestic and foreign Patents, all licenses
relating to any of the foregoing and all income and royalties with respect to
any licenses (including such Patents and licenses described in Schedule 2), all
rights to sue for past, present or future infringement thereof, all rights
arising therefrom and pertaining thereto and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof;

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(ii)           all Copyrights, including domestic and foreign Copyrights,
together with underlying works of authorship (including titles), whether or not
the underlying works of authorship have been published and whether said
Copyrights are statutory or arise under the common law, and all other rights and
works of authorship, all licenses relating to any of the foregoing and all
income and royalties with respect to any licenses (including the Copyrights
described in Schedule 2), and all income and royalties with respect thereto, and
all other rights, Claims and demands in any way relating to any such Copyrights
or works, including royalties and rights to sue for past, present or future
infringement, and all rights of renewal and extension of such Copyright;
 
(iii)          all Trademarks, including state (including common law), federal
and foreign trademarks, service marks and trade names, and applications for
registration of such Trademarks, all licenses relating to any of the foregoing
and all income and royalties with respect to any licenses (including the
Trademarks and licenses described in Schedule 2), whether registered or
unregistered and wherever registered, all rights to sue for past, present or
future infringement or unconsented use thereof, all rights arising therefrom and
pertaining thereto and all reissues, extensions and renewals thereof;
 
(iv)           all Technical Information;
 
(v)            the entire goodwill of or associated with the businesses now or
hereafter conducted by such Grantor connected with and symbolized by any of the
aforementioned properties and assets; and
 
(vi)          all other Intellectual Property, all other proprietary rights, or
other similar property and all other general intangibles associated with or
arising out of any of the aforementioned properties and assets and not otherwise
described above, including rights to sue for or collect damages for any past,
present or future infringement of any of the foregoing.
 
Intellectual Property Collateral shall not include any Excluded Assets.
 
“Intellectual Property Security Agreement” means each security agreement in
relation to Patents, Trademarks and Copyrights of the Grantors, as may be
amended, supplemented or otherwise modified from time to time, in form and
substance reasonably satisfactory to the Administrative Agent, supplementary to
this Agreement and prepared for purposes of recordation with the U.S. Patent and
Trademark Office.
 
“Partnership and LLC Collateral” means any and all limited, limited liability
and general partnership interests and limited liability company interests of any
type or nature (including any such interests in the Borrower’s direct or
indirect Subsidiaries (but excluding any Immaterial Subsidiary) now or hereafter
owned by any Grantor), whether now existing or hereafter acquired or arising,
including any such interests specified in Schedule 3.

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“Pledge Supplement” has the meaning specified in Section 3(h).
 
“Pledged Collateral” means any and all (i) Pledged Shares; (ii) additional
capital stock or other Equity Interests of the direct or indirect Subsidiaries
of the Borrower (but excluding any Immaterial Subsidiary), whether certificated
or uncertificated; (iii) other Investment Property of any
Grantor; (iv) warrants, options or other rights entitling any Grantor to acquire
any interest in Equity Interests or other securities of such Subsidiaries or any
other Person; (v) Partnership and LLC Collateral; (vi) Instruments; (vii) 
securities, property, interest, dividends and other payments and distributions
issued as an addition to, in redemp-tion of, in renewal or exchange for, in
substitution or upon conversion of, or otherwise on account of, any of the
foregoing; (viii) certificates and instruments now or hereafter representing or
evidencing any of the foregoing; (ix) rights, interests and Claims with respect
to the foregoing, including under any and all related agreements, instruments
and other documents, and (x) cash and non-cash proceeds of any of the foregoing,
in each case whether presently existing or owned or hereafter arising or
acquired and wherever located, and as from time to time received or receivable
by, or otherwise paid or distributed to or acquired by, any Grantor, but in all
cases excluding the Excluded Assets.
 
“Pledged Collateral Agreements” has the meaning specified in Section 5.
 
“Pledged Shares” means all of the issued and outstanding Equity Interests,
whether certificated or uncertificated, of the Borrower’s direct or indirect
Subsidiaries now or hereafter owned by any Grantor, including each Subsidiary
identified on Schedule 3 (as amended or supplemented from time to time).
 
“Proceeds Account” has the meaning set forth in Section 10(c).
 
“Rights to Payment” means any and all of any Grantor’s Accounts and any and all
of any Grantor’s rights and Claims to the payment or receipt of money or other
forms of consideration of any kind in, to and under or with respect to its
Chattel Paper, Documents, General Intangibles, Instruments, Investment Property,
Letter-of-Credit Rights, Proceeds and Supporting Obligations, but in all cases
excluding the Excluded Assets.
 
“Secured Obligations” means all Obligations, whether in respect of Indebtedness
or other obligations of the Grantors to any Secured Party under the Credit
Agreement, the Notes, the Guarantee or any of the other Loan Documents or
otherwise.
 
“Supporting Obligations” means all supporting obligations, as such term is
defined in Section 9-102 of the UCC.
 
(c)          Terms Defined in the NY UCC.  Where applicable and except as
otherwise defined herein, terms used in this Agreement shall have the meanings
assigned to them in the NY UCC; provided, however, that to the extent that the
NY UCC is used to define any term herein and such term is defined differently in
different Articles of the NY UCC, the definition of such term contained in
Article 9 shall govern.

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(d)          Interpretation.  The rules of interpretation set forth in
Section 1.03 of the Credit Agreement shall be applicable to this Agreement and
are incorporated herein by this reference.
 
SECTION 2          Security Interest.
 
(a)          Grant of Security Interest.  As security for the payment and
performance of the Secured Obligations, each Grantor hereby grants to the
Administrative Agent, for itself and on behalf of and for the ratable benefit of
the other Secured Parties, a security interest in all of such Grantor’s right,
title and interest in, to and under all of such Grantor’s personal property,
wherever located and whether now existing or owned or hereafter acquired or
arising, including the following property (collectively, the “Collateral”): 
(i) all Accounts; (ii) all Chattel Paper; (iii) all Commercial Tort Claims;
(iv) all Deposit Accounts; (v) all Books and Documents; (vi) all Equipment;
(vii) all General Intangibles; (viii) all Instruments; (ix) all Inventory;
(x) all Investment Property; (xi) all Letter-of-Credit Rights; (xii) all other
Goods; (xiii) all Intellectual Property Collateral; (xiv) all money, (xv) all
Pledged Collateral, (xvi) all products and Proceeds of any and all of the
foregoing, and (xvii) all Supporting Obligations of any and all of the
foregoing, but in all cases excluding the Excluded Assets.
 
(b)          Grantors Remain Liable.  Anything herein to the contrary
notwithstanding, (i) each Grantor shall remain liable under any Contracts
included in the Collateral, to the extent set forth therein, to perform all of
its duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (ii) the exercise by the Administrative Agent of any of
the rights granted to the Administrative Agent hereunder shall not release any
Grantor from any of its duties or obligations under any such Contracts included
in the Collateral, and (iii) neither the Administrative Agent nor any other
Secured Party shall have any obligation or liability under any such Contracts
included in the Collateral by reason of this Agreement, nor shall the
Administrative Agent or any other Secured Party be obligated to perform any of
the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any such Contract included in the Collateral hereunder.
 
(c)          Continuing Security Interest.  Each Grantor agrees that this
Agreement shall create a continuing security interest in the Collateral which
shall remain in effect until terminated in accordance with Section 23.
 
SECTION 3          Perfection and Priority.
 
(a)          Financing Statements, Etc.  Each Grantor hereby authorizes the
Administrative Agent (or its designee) to file at any time and from time to time
any financing statements describing the Collateral, and each Grantor shall
execute and deliver to the Administrative Agent, and each Grantor hereby
authorizes the Administrative Agent (or its designee) to file (with or without
such Grantor’s signature), at any time and from time to time, all amendments to
financing statements, continuation financing statements, termination statements
(subject to the prior written consent of the applicable secured party),
Intellectual Property Security Agreements, assignments, fixture filings,
affidavits, reports, notices and all other documents and instruments, in form
reasonably satisfactory to the Administrative Agent, as the Administrative Agent
may reasonably request, to perfect, continue the perfection of, maintain the
priority of or provide notice of the Administrative Agent’s security interest in
the Collateral and to accomplish the purposes of this Agreement.  Without
limiting the generality of the foregoing, each Grantor (i) ratifies and
authorizes the filing by the Administrative Agent of any financing statements
filed with respect to the Collateral prior to the date hereof and (ii) shall
from time to time take the actions specified in subsections (b) through (i)
below.

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(b)          Delivery of Pledged Collateral.  Each Grantor hereby agrees to
promptly deliver to or for the account of the Administrative Agent, at the
address and to the Person to be designated by the Administrative Agent, the
certificates, instruments and other writings representing any Pledged Collateral
after such time as Grantor becomes entitled to receive or receives such Pledged
Collateral, which shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank,
in form satisfactory to the Administrative Agent.  If any Grantor shall become
entitled to receive or shall receive any Pledged Collateral after the date
hereof, such Grantor shall accept the foregoing as the Administrative Agent for
the Administrative Agent, shall hold it in trust for the Administrative Agent,
shall segregate it from other property or funds of such Grantor, and shall
promptly deliver the same and all certificates, instruments and other writings
representing such Pledged Collateral forthwith to or for the account of the
Administrative Agent, at the address and to the Person to be designated by the
Administrative Agent, which shall be in suitable form for transfer by delivery,
or shall be accompanied by duly executed instruments of transfer or assignment
in blank in form satisfactory to the Administrative Agent.
 
(c)          Transfer of Security Interest Other Than by Delivery.  If for any
reason Pledged Collateral cannot be delivered to or for the account of the
Administrative Agent as provided in Section 3(b), each applicable Grantor shall
promptly take such other steps as may be necessary or as shall be reasonably
requested from time to time by the Administrative Agent to effect a transfer of
a perfected first priority security interest in and pledge of the Pledged
Collateral to the Administrative Agent for itself and on behalf of and for the
ratable benefit of the other Secured Parties pursuant to the NY UCC.  To the
extent practicable, each such Grantor shall thereafter deliver the Pledged
Collateral to or for the account of the Administrative Agent as provided in
Section 3(b).
 
(d)          Intellectual Property Collateral.  (i)  Each Grantor shall execute
and deliver to the Administrative Agent, concurrently with the execution of this
Agreement, such Intellectual Property Security Agreements as the Administrative
Agent may reasonably request, and record or cause to be recorded (including by
giving authorization to the Administrative Agent to so record) such Intellectual
Property Security Agreements with the U.S. Patent and Trademark Office and take
any such further or other action as may be necessary, or as the Administrative
Agent may reasonably request, to perfect the Administrative Agent’s security
interest in such Intellectual Property Collateral with the U.S. Patent and
Trademark Office or pursuant to the NY UCC, (ii) concurrently with the delivery
of a Compliance Certificate in connection with the delivery of financial
statements under Section 8.01(b) of the Credit Agreement, for any Intellectual
Property Collateral created or acquired by any Grantor after the date hereof
which is registered or becomes registered or the subject of an application for
registration with the U.S. Patent and Trademark Office, such Grantor shall
modify this Agreement by amending Schedule 2 to include any Intellectual
Property Collateral which becomes part of the Collateral and which was not
included on Schedule 2 as of the date hereof and record such Intellectual
Property Security Agreement with the U.S. Patent and Trademark Office, and take
(or cause to be taken) such other action as may be necessary, or as the
Administrative Agent may reasonably request, to perfect the Administrative
Agent’s security interest in such Intellectual Property Collateral.

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(e)         Documents, Etc.  Each Grantor shall deliver to the Administrative
Agent, or an agent designated by it, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all Documents and Chattel
Paper, and all other Rights to Payment, in each case, with a face value in
excess of $100,000 individually and $250,000 in the aggregate for all such
Documents, Chattel paper and other Rights to Payment, at any time evidenced by
promissory notes, trade acceptances or other instruments, not already delivered
hereunder pursuant to this Section 3.
 
(f)          Bailees.  Any Person (other than the Administrative Agent) at any
time and from time to time holding all or any portion of the Collateral with a
fair market value in excess of $100,000 individually and $250,000 in the
aggregate shall be deemed to, and shall, hold the Collateral as the agent of,
and as pledge holder for, the Administrative Agent.  At any time and from time
to time, the Administrative Agent may give notice to any such Person holding all
or any portion of the Collateral with a fair market value in excess of $100,000
individually and $250,000 in the aggregate that such Person is holding the
Collateral as the agent and bailee of, and as pledge holder for, the
Administrative Agent, and request to obtain such Person’s written acknowledgment
thereof.  Without limiting the generality of the foregoing, each Grantor will
join with the Administrative Agent in notifying any Person who has possession of
any Collateral with a fair market value in excess of $100,000 individually and
$250,000 in the aggregate of the Administrative Agent’s security interest
therein and using commercially reasonable efforts to obtain an acknowledgment
from such Person that it is holding the Collateral for the benefit of the
Administrative Agent.
 
(g)         Control.  Each Grantor will cooperate with the Administrative Agent
in obtaining control (as defined in the NY UCC) of Collateral consisting of
(i) any Deposit Accounts (other than Excluded Accounts), (ii) any Electronic
Chattel Paper with a face value in excess of $100,000 individually and $250,000
in the aggregate, (iii) any Investment Property with a face value in excess of
$100,000 individually and $250,000 in the aggregate or (iv) any Letter-of-Credit
Rights with a face value in excess of $100,000 individually and $250,000 in the
aggregate, including delivery of Control Agreements in form and substance
reasonably satisfactory to the Administrative Agent, as the Administrative Agent
may reasonably request, to perfect, continue the perfection of, maintain the
priority of or provide notice of the Administrative Agent’s security interest in
such Collateral.
 
(h)          After-Acquired Equity Interests.  In the event that any Grantor
acquires any Pledged Collateral after the date hereof, such Grantor shall
deliver to the Administrative Agent a pledge supplement, duly executed by such
Grantor and substantially in the form of Exhibit B (the “Pledge Supplement”),
together with all schedules thereto, reflecting such additional Pledged
Collateral, and the certificates and other documents required to be delivered
pursuant to Section 3.01(b) hereof in respect of such additional Pledged
Collateral.  Notwithstanding the foregoing, it is understood and agreed that the
security interest of the Administrative Agent shall attach to such Pledged
Collateral immediately upon any Grantor’s acquisition of rights therein and
shall not be affected by the failure of any Grantor to deliver a Pledge
Supplement.

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(i)          Purchase Money Security Interests.  To the extent any Grantor uses
the proceeds of any of the Secured Obligations to purchase Collateral, such
Grantor’s repayment of the Secured Obligations shall apply on a “first-in,
first-out” basis so that the portion of the Secured Obligations used to purchase
a particular item of Collateral shall be paid in the chronological order in
which such Grantor purchased the Collateral.
 
SECTION 4          Representations and Warranties.  In addition to the
representations and warranties of each Grantor set forth in the Credit
Agreement, each Grantor represents and warrants to each Secured Party that:
 
(a)          Location of Chief Executive Office and Collateral.  Such Grantor’s
chief executive office and principal place of business (as of the date of this
Agreement) is located at the address set forth in Schedule 1, and all other
locations (as of the date of this Agreement) where such Grantor conducts
business or Collateral is kept are set forth in Schedule 1.
 
(b)         Locations of Books.  All locations where Books pertaining to the
Rights to Payment of such Grantor are kept, including all equipment necessary
for accessing such Books and the names and addresses of all service bureaus,
computer or data processing companies and other Persons keeping any Books or
collecting Rights to Payment for such Grantor, are set forth in Schedule 1.
 
(c)         Jurisdiction of Organization and Names.  Such Grantor’s jurisdiction
of organization is set forth in Schedule 1; and such Grantor’s exact legal name
is as set forth in the signature pages of this Agreement.  All trade names and
trade styles under which such Grantor presently conducts its business operations
are set forth in Schedule 1, and, except as set forth in Schedule 1, such
Grantor has not, at any time in the past:  (i) been known as or used any other
corporate, trade or fictitious name; (ii) changed its name; (iii) been the
surviving or resulting corporation in a merger or consolidation; or
(iv) acquired through asset purchase or otherwise any business of any Person.
 
(d)          Collateral.  Such Grantor has rights in or the power to transfer
the Collateral, and such Grantor is the sole and complete owner of the
Collateral (or, in the case of after-acquired Collateral, at the time such
Grantor acquires rights in such Collateral, will be the sole and complete owner
thereof), free from any Lien other than Permitted Liens.
 
(e)          Enforceability; Priority of Security Interest.  (i) This Agreement
creates a security interest which is enforceable against the Collateral in which
such Grantor now has rights and will create a security interest which is
enforceable against the Collateral in which such Grantor hereafter acquires
rights at the time such Grantor acquires any such rights; and (ii) the
Administrative Agent has a perfected and first priority security interest in the
Collateral in which such Grantor now has rights, and will have a perfected and
first priority security interest in the Collateral in which such Grantor
hereafter acquires rights at the time such Grantor acquires any such rights, in
each case, for the Administrative Agent’s own benefit and for the ratable
benefit of the other Secured Parties, subject to Permitted Liens and securing
the payment and performance of the Secured Obligations.

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(f)          Other Financing Statements.  Other than (i) financing statements
filed in connection with any Permitted Liens and (ii) financing statements in
favor of the Administrative Agent for itself and on behalf of the other Secured
Parties, no effective financing statement naming such Grantor as debtor,
assignor, grantor, mortgagor, pledgor or the like and covering all or any part
of the Collateral is on file in any filing or recording office in any
jurisdiction.
 
(g)          Rights to Payment.
 
(i)          The Rights to Payment of such Grantor represent valid, binding and
enforceable obligations of the account debtors or other Persons obligated
thereon, representing undisputed, bona fide transactions completed in accordance
with the terms and provisions contained in any documents related thereto, and
are and will be genuine and what they purport to be;
 
(ii)          such Grantor has not assigned any of its rights under any of its
Rights to Payment except as provided in this Agreement or as set forth in the
other Loan Documents; and
 
(iii)         all Rights to Payment of such Grantor comply in all material
respects with all applicable Laws concerning form, content and manner of
preparation and execution.
 
(h)          Inventory.  No Inventory of such Grantor is stored with any bailee,
warehouseman or similar Person or on any premises leased to such Grantor, no
such Inventory has been consigned to such Grantor or consigned by such Grantor
to any Person, nor is any such Inventory held by such Grantor for any Person
under any “bill and hold” or other arrangement, except as set forth in
Schedule 1 or, after the date hereof, with any bailee at any other location that
is duly disclosed to the Administrative Agent pursuant to Section 5(n).
 
(i)           [Reserved]
 
(j)           Equipment.  None of the Equipment is leased from or to any Person,
except as set forth at Schedule 1 or as otherwise disclosed to the
Administrative Agent and the Lenders.
 
(k)          Deposit Accounts.  The names and addresses of all financial
institutions at which such Grantor maintains its Deposit Accounts, and the
account numbers and account names of such Deposit Accounts, are set forth in
Schedule 1.
 
(l)          Instrument Collateral.  (i) Such Grantor has not previously
assigned any interest in any Instruments held by such Grantor (other than such
interests as will be released on or before the date hereof), (ii) no Person
other than such Grantor owns an interest in such Instruments (whether as joint
holders, participants or otherwise), and (iii) no material default exists under
or in respect of such Instruments.

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(m)        Pledged Shares, Partnership and LLC Collateral and other Pledged
Collateral.  (i) All of the Pledged Shares and Partnership and LLC Collateral of
such Grantor have been, and upon issuance any additional Pledged Collateral
consisting of Pledged Shares, Partnership and LLC Collateral or any other
securities of such Grantor, will be, duly and validly issued, and are and will
be fully paid and non-assessable, subject in the case of Partnership and LLC
Collateral to future assessments required under applicable Law and any
applicable partnership or operating agreement, (ii) such Grantor is or, in the
case of any such additional Pledged Collateral will be, the legal record and
beneficial owner thereof, (iii) there are no restrictions on the transferability
of such Pledged Collateral or such additional Pledged Collateral to the
Administrative Agent or with respect to the foreclosure, transfer or disposition
thereof by the Administrative Agent, except as provided under applicable
securities or “Blue Sky” laws, (iv) the Pledged Shares and Partnership and LLC
Collateral of such Grantor constitute 100% of the issued and outstanding shares
of capital stock of all directly and indirectly owned Subsidiaries of such
Grantor (except, in the case of Foreign Subsidiaries, for any securities in the
nature of directors’ qualifying shares required pursuant to applicable Law), and
no securities convertible into or exchangeable for any shares of capital stock
of any such Subsidiary, or any options, warrants or other commitments entitling
any Person to purchase or otherwise acquire any shares of capital stock of any
such Subsidiary, are issued and outstanding, (v) any and all Pledged Collateral
Agreements which affect or relate to the voting or giving of written consents
with respect to any of the Pledged Shares pledged by such Grantor, and any and
all other Pledged Collateral Agreements relating to the Partnership and LLC
Collateral of such Grantor, have been disclosed in writing to the Administrative
Agent and the Lenders, and (vi) as to each such Pledged Collateral Agreement
relating to the Partnership and LLC Collateral of such Grantor, (A) such
agreement contains the entire agreement between the parties thereto with respect
to the subject matter thereof, has not been amended or modified, and is in full
force and effect in accordance with its terms, (B) there exists no material
violation or material default under any such agreement by such Grantor or to the
knowledge of such Grantor party thereto, the other parties thereto, and (C) such
Grantor has not knowingly waived or released any of its material rights under or
otherwise consented to a material departure from the terms and provisions of any
such agreement.
 
(n)         Other Investment Property; Instruments; and Chattel Paper.  All
Securities Accounts of such Grantor and other Investment Property of such
Grantor are set forth in Schedule 1, and all Instruments and Chattel Paper held
by such Grantor are also set forth in Schedule 1.
 
(o)          Control Agreements.  No Control Agreements exist with respect to
any Collateral held by such Grantor other than any Control Agreements in favor
of the Administrative Agent.
 
(p)          Letter-of-Credit Rights.  Such Grantor does not have any
Letter-of-Credit Rights except as set forth in Schedule 1.
 
(q)          Commercial Tort Claims.  Such Grantor does not have any Commercial
Tort Claims except as set forth in Schedule 1.
 
(r)          Leases.  Such Grantor is not and will not become a lessee under any
real property lease or other agreement governing the location of Collateral at
the premises of another Person pursuant to which the lessor or such other Person
may obtain any rights in any of the Collateral, and no such lease or other such
agreement now prohibits, restrains, impairs or will prohibit, restrain or impair
such Grantor’s right to remove any Collateral from the premises at which such
Collateral is situated, except for the usual and customary restrictions
contained in such leases of real property.

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SECTION 5          Covenants.  So long as any of the Secured Obligations (other
than Warrant Obligations and contingent indemnification obligations as to which
no Claims have been asserted) remain unsatisfied or any Lender shall have any
Commitment, each Grantor agrees that:
 
(a)          Defense of Collateral.  Such Grantor will appear in and defend any
action, suit or proceeding which may affect to a material extent its title to,
or right or interest in, or the Administrative Agent’s right or interest in, the
Collateral.
 
(b)          Preservation of Collateral.  Such Grantor will do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Collateral.
 
(c)          Compliance with Laws, Etc.  Such Grantor will comply with all laws,
regulations and ordinances, and all policies of insurance, relating in a
material way to the possession, operation, maintenance and control of the
Collateral.
 
(d)        Location of Books and Chief Executive Office.  Such Grantor will: 
(i) keep all Books pertaining to the Rights to Payment of such Grantor at the
locations set forth in Schedule 1; and (ii) give at least seven (7) Business
Days prior written notice to the Administrative Agent of (A) any changes in any
location where Books pertaining to the Rights to Payment of such Grantor are
kept, including any change of name or address of any service bureau, computer or
data processing company or other Person preparing or maintaining any such Books
or collecting Rights to Payment for such Grantor or (B) any changes in the
location of such Grantor’s chief executive office or principal place of
business.
 
(e)          Location of Collateral.  Such Grantor will:  (i) keep the
Collateral held by such Grantor at the locations set forth in Schedule 1 or at
such other locations as may be disclosed in writing to the Administrative Agent
pursuant to clause (ii) and will not remove any such Collateral from such
locations (other than in connection with sales of Inventory in the ordinary
course of such Grantor’s business, other dispositions permitted by Section 5 and
movements of Collateral from one disclosed location to another disclosed
location within the United States), except upon at least seven (7) Business Days
prior written notice of any removal to the Administrative Agent; and (ii) give
the Administrative Agent at least five (5) Business Days prior written notice of
any change in the locations set forth in Schedule 1.
 
(f)          Change in Name, Identity or Structure.  Such Grantor will give at
least seven (7) Business Days’ prior written notice to the Administrative Agent
of (i) any change in name, (ii) any change in its jurisdiction of organization,
(iii) any change in its registration as an organization (or any new
registration); and (iv) any changes in its identity or structure in any manner
which might make any financing statement filed hereunder incorrect or
misleading; provided that such Grantor shall not change its jurisdiction of
organization to a jurisdiction outside of the United States.

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(g)          Maintenance of Records.  Such Grantor will keep separate, accurate
and complete Books with respect to the Collateral held by such Grantor,
disclosing the Administrative Agent’s security interest hereunder.
 
(h)          Disposition of Collateral.  Such Grantor will not surrender or lose
possession of, sell, lease, rent, or otherwise dispose of or transfer any of the
Collateral held or owned by such Grantor or any right or interest therein,
except to the Administrative Agent or to the extent otherwise permitted by the
Loan Documents; provided that no such disposition or transfer of Investment
Property or Instruments shall be permitted while any Event of Default exists.
 
(i)           Liens.  Such Grantor will keep the Collateral held by such Grantor
free of all Liens except Permitted Liens.
 
(j)          Leased Premises; Collateral Held by Warehouseman, Bailee, Etc.  At
the Administrative Agent’s request, such Grantor will use commercially
reasonable efforts to obtain from each Person from whom such Grantor leases any
premises, and from each other Person at whose premises any Collateral with a
fair market value in excess of $100,000 individually and $250,000 in the
aggregate held by such Grantor is at any time present (including any bailee,
warehouseman or similar Person), any such collateral access, subordination,
landlord waiver, bailment, consent and estoppel agreements as the Administrative
Agent may reasonably require, in form and substance satisfactory to the
Administrative Agent.
 
(k)          Rights to Payment.  Such Grantor will:
 
(i)          with such frequency as the Administrative Agent may reasonably
require or as may be required under the Credit Agreement (but no more than once
per fiscal quarter unless an Event of Default has occurred and is continuing),
furnish to the Administrative Agent full and complete reports, in form and
substance reasonably satisfactory to the Administrative Agent, with respect to
the Accounts.
 
(ii)        if any Accounts of such Grantor arise from Contracts with the United
States or any department, agency or instrumentality thereof, immediately notify
the Administrative Agent thereof and execute any documents and instruments and
take any other steps reasonably requested by the Administrative Agent in order
that all monies due and to become due thereunder shall be assigned to the
Administrative Agent and notice thereof given to the Federal authorities under
the Federal Assignment of Claims Act;

(iii)        upon the occurrence and during the continuance of an Event of
Default, upon the reasonable request of the Administrative Agent, notify the
account debtors and other obligors on the Rights to Payment or any designated
portion thereof that payment shall be made directly to the Administrative Agent
or to such other Person or location as the Administrative Agent shall specify;
and

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(iv)         upon the occurrence and during the continuance of any Event of
Default, establish such lockbox or similar arrangements for the payment of such
Grantor’s Accounts and other Rights to Payment as the Administrative Agent shall
require.
 
(l)          Instruments, Investment Property, Etc.  Upon the request of the
Administrative Agent, such Grantor will (i) promptly deliver to the
Administrative Agent, or an agent designated by it, appropriately endorsed or
accompanied by appropriate instruments of transfer or assignment, all
Instruments, Documents and Chattel Paper held by such Grantor, all letters of
credit of such Grantor, and all other Rights to Payment held by such Grantor at
any time evidenced by promissory notes, trade acceptances or other instruments,
in each case, with a face value in excess of $100,000 individually and $250,000
in the aggregate for all such items of Collateral, (ii) cause any securities
intermediaries to show on their books that the Administrative Agent is the
entitlement holder with respect to any Investment Property held by such
securities intermediary on behalf of such Grantor, and/or obtain Control
Agreements in favor of the Administrative Agent from such securities
intermediaries, in form and substance satisfactory to the Administrative Agent,
with respect to any such Investment Property, as reasonably requested by the
Administrative Agent, and (iii) provide such notice, obtain such acknowledgments
and take all such other action, with respect to any Chattel Paper, Documents and
Letter-of-Credit Rights, in each case, with a face value in excess of $100,000
individually and $250,000 in the aggregate for all such items of Collateral held
by such Grantor, as the Administrative Agent shall reasonably specify.
 
(m)         Deposit Accounts and Securities Accounts.  Such Grantor will
promptly notify the Administrative Agent of the establishment of any new Deposit
Account and of any new Securities Account established by such Grantor with
respect to any Investment Property held by such Grantor.
 
(n)          Inventory.  Such Grantor will not store any Inventory with a
bailee, warehouseman or similar Person or on premises leased to such Grantor
other than those locations identified in Schedule 1, and will not dispose of any
Inventory on a bill-and-hold, guaranteed sale, sale and return, sale on
approval, consignment or similar basis, and will not acquire any Inventory from
any Person on any such basis.
 
(o)          Intellectual Property Collateral.  Such Grantor:
 
(i)         except as permitted under the Credit Agreement, will not allow or
suffer any Intellectual Property Collateral held by such Grantor to become
abandoned, nor any registration thereof to be terminated, forfeited, expired or
dedicated to the public, except as shall be reasonable and appropriate in
accordance with prudent business practice; and
 
(ii)          will use commercially reasonable efforts to prosecute all
applications for patents and trademarks, and file and prosecute any and all
continuations, continuations-in-part, applications for reissue, applications for
certificate of correction and like matters as shall be reasonable and
appropriate in accordance with prudent business practice, and promptly and
timely pay any and all maintenance, license, registration and other fees, taxes
and expenses incurred in connection with any Intellectual Property Collateral
held by such Grantor.

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(p)          Notices, Reports and Information.  Such Grantor will (i) notify the
Administrative Agent of any other modifications of or additions to the
information contained in Schedule 1 (including any acquisition or holding of an
interest in any Chattel Paper, Commercial Tort Claims and Letter-of-Credit
Rights); (ii) notify the Administrative Agent of any material Claim made or
asserted against the Collateral by any Person and of any change in the
composition of the Collateral or other event which could materially adversely
affect the value of the Collateral or the Administrative Agent’s Lien thereon;
(iii) furnish to the Administrative Agent such listings, descriptions and
schedules with respect to such Grantor’s Equipment and Inventory, and such other
reports and other information in connection with the Collateral, as the
Administrative Agent may reasonably request, all in reasonable detail; and
(iv) upon the reasonable request of the Administrative Agent make such demands
and requests for information and reports as such Grantor is entitled to make in
respect of the Collateral.
 
(q)          Shareholder Agreements and Other Agreements.  Such Grantor shall:
 
(i)         comply in all material respects with all of its obligations under
any shareholders agreement, operating agreement, partnership agreement, voting
trust, proxy agreement or other agreement or understanding (collectively, the
“Pledged Collateral Agreements”) to which it is a party and shall enforce all of
its rights thereunder,
 
(ii)        take all actions necessary to cause each such Pledged Collateral
Agreement relating to Partnership and LLC Collateral to provide specifically at
all times that: (A) no such Partnership and LLC Collateral shall be a security
governed by Article 8 of the applicable UCC; and (B) no consent of any member,
manager, partner or other Person shall be a condition to the admission as a
member or partner of any transferee (including the Lender) that acquires
ownership of such Partnership and LLC Collateral as a result of the exercise by
the Lender of any remedy hereunder or under applicable law,
 
(iii)       not take vote or enable to take any other action to certificate any
shares of Pledged Collateral of the Borrower or of any of its direct
Subsidiaries to the extent such shares are not certificated as of the Closing
Date;
 
(iv)       not vote to enable or take any other action to:  (A) amend or
terminate, or waive compliance with any of the terms of, any such Pledged
Collateral Agreement, certificate or articles of incorporation, bylaws or other
organizational documents in any way that materially changes the rights of such
Grantor with respect to any such Pledged Collateral in a manner adverse to the
Administrative Agent or the other Secured Parties or that adversely affects the
validity, perfection or priority of the Administrative Agent’s security interest
therein.
 
(v)        Additionally, such Grantor agrees that no such Partnership and LLC
Collateral (A) shall be dealt in or traded on any securities exchange or in any
securities market, (B) shall constitute an investment company security, or
(C) shall be held by such Grantor in a securities account.
 
(r)           Insurance. (i) Such Grantor shall carry and maintain in full force
and effect, at the expense of such Grantor and with financially sound and
reputable insurance companies, insurance with respect to the Collateral held by
such Grantor in such amounts, with such deductibles and covering such risks as
shall be specified in the Credit Agreement.

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SECTION 6          Rights to Payment and Pledged Collateral.
 
(a)          Collection of Rights to Payment.  Until the Administrative Agent
exercises its rights hereunder to collect any Rights to Payment of any Grantor,
each such Grantor shall endeavor in the first instance diligently to collect all
amounts due or to become due on or with respect to the Rights to Payment held by
such Grantor, in each case, to the extent doing so is in the ordinary course of
business of such Grantor, consistent with past practice.  At the request of the
Administrative Agent, upon the occurrence and during the continuance of any
Event of Default, all remittances received by such Grantor shall be held in
trust for the Administrative Agent and, in accordance with the Administrative
Agent’s instructions, remitted to the Administrative Agent or deposited to an
account with the Administrative Agent in the form received (with any necessary
endorsements or instruments of assignment or transfer).
 
(b)          Pledged Collateral.  Unless and until an Event of Default shall
have occurred and be continuing, each Grantor shall be entitled to receive and
retain for its own account any cash dividend on or other cash distribution or
payment, if any, in respect of the Pledged Collateral, to the extent consistent
with the Credit Agreement or the Guarantee, as applicable; provided, that,
except in connection with transactions permitted under Section 9.05 of the
Credit Agreement, such Grantor shall not be entitled to receive (i) cash paid,
payable or otherwise distributed in redemption of, or in exchange for or in
substitution of, any Pledged Collateral held by such Grantor, or (ii) dividends
and other distributions paid or payable in cash in respect of any such Pledged
Collateral in connection with a partial or total liquidation or dissolution of
any Person whose ownership interests constitute Pledged Collateral or in
connection with a reduction of capital, capital surplus or paid-in-surplus or
any other type of recapitalization involving any such Person.  At the request of
the Administrative Agent, upon the occurrence and during the continuance of any
Event of Default, the Administrative Agent shall be entitled to receive all
distributions and payments of any nature with respect to any Pledged Collateral,
and all such distributions or payments received by such Grantor shall be held in
trust for the Administrative Agent and, in accordance with the Administrative
Agent’s instructions, remitted to the Administrative Agent or deposited to an
account with the Administrative Agent in the form received (with any necessary
endorsements or instruments of assignment or transfer).  Following the
occurrence and during the continuance of an Event of Default any such
distributions and payments with respect to any such Pledged Collateral held in
any Securities Account shall be held and retained in such Securities Account, in
each case as part of the Collateral hereunder.  Additionally, with respect to
any of the Pledged Collateral, the Administrative Agent shall have the right,
upon the occurrence and during the continuance of an Event of Default, following
prior written notice to any applicable Grantor, to vote and to give consents,
ratifications and waivers with respect to any such Pledged Collateral and to
exercise all rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining thereto, as if the Administrative Agent were
the absolute owner thereof; provided that the Administrative Agent shall have no
duty to exercise any of the foregoing rights afforded to it and shall not be
responsible to such Grantor or any other Person for any failure to do so or
delay in doing so.

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(c)          Voting Prior to an Event of Default.  Unless and until an Event of
Default shall have occurred and be continuing, each Grantor shall have the right
to vote the Pledged Collateral held by such Grantor and to give consents,
ratifications and waivers in respect thereof, and shall retain the power to
control the direction, management and policies of any Person comprising such
Pledged Collateral to the same extent as such Grantor would if such Pledged
Collateral were not pledged to the Administrative Agent pursuant to this
Agreement; provided, that no vote shall be cast or consent, waiver or
ratification given or action taken which would have the effect of materially
impairing the position or interest of the Administrative Agent and the other
Secured Parties in respect of such Pledged Collateral or which would alter the
voting rights with respect to the stock or other ownership interest in or of any
such Person or be inconsistent with or violate any provision of this Agreement,
the Credit Agreement, or any other Loan Documents.  If applicable, such Grantor
shall be deemed the beneficial owner of all such Pledged Collateral for purposes
of Sections 13 and 16 of the Exchange Act and agrees to file all reports
required to be filed by beneficial owners of securities thereunder.  The
Administrative Agent shall execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments as such
Grantor may reasonably request for the purpose of enabling such Grantor to
exercise the voting and other rights which it is entitled to exercise pursuant
to this subsection (c) and to receive the distributions which it is authorized
to receive and retain pursuant to this subsection (c).
 
(d)          Certain Other Administrative Matters.  Upon the occurrence and
during the continuance of an Event of Default, the Administrative Agent may (i)
cause any of the Pledged Collateral to be transferred into its name or into the
name of its nominee or nominees (subject to the revocable rights specified in
this Section 6) and (ii) exchange uncertificated Pledged Collateral for
certificated Pledged Collateral, and to exchange certificated Pledged Collateral
for certificates of larger or smaller denominations, for any purpose consistent
with this Agreement.
 
SECTION 7          Authorization; Administrative Agent Appointed
Attorney-in-Fact.  In addition to (and not in limitation of) any other right or
remedy provided to the Administrative Agent hereunder, the Administrative Agent
shall have the right to, in the name of any Grantor, or in the name of the
Administrative Agent or otherwise, without notice to or assent by any such
Grantor, and each Grantor hereby constitutes and appoints the Administrative
Agent (and any of the Administrative Agent’s officers or employees or agents
designated by the Administrative Agent) as such Grantor’s true and lawful
attorney-in-fact, with full power and authority to:
 
(a)          file any of the financing statements which must be filed to perfect
or continue to perfect, maintain the priority of or provide notice of the
Administrative Agent’s Lien in the Collateral;
 
(b)          take possession of and endorse any notes, acceptances, checks,
drafts, money orders or other forms of payment or security and collect any
Proceeds of any Collateral;
 
(c)          sign and endorse any invoice or bill of lading relating to any of
the Collateral, warehouse or storage receipts, drafts against customers or other
obligors, assignments, notices of assignment, verifications and notices to
customers or other obligors;

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(d)          notify the U.S. Postal Service and other postal authorities to
change the address for delivery of mail addressed to such Grantor to such
address as the Administrative Agent may designate; and, without limiting the
generality of the foregoing, establish with any Person lockbox or similar
arrangements for the payment of the Rights to Payment of such Grantor;
 
(e)          receive, open and dispose of all mail addressed to such Grantor;
 
(f)          send requests for verification of Rights to Payment to the
customers or other obligors of such Grantor;
 
(g)          contact, or direct such Grantor to contact, all account debtors and
other obligors on the Rights to Payment of such Grantor and instruct such
account debtors and other obligors to make all payments directly to the
Administrative Agent;
 
(h)          assert, adjust, sue for, compromise or release any Claims under any
policies of insurance;
 
(i)          exercise dominion and control over, and refuse to permit further
withdrawals from, any Deposit Accounts of such Grantor maintained with the
Administrative Agent, any Lender or any other bank, financial institution or
other Person;
 
(j)          notify each Person maintaining lockbox or similar arrangements for
the payment of the Rights to Payment of such Grantor to remit all amounts
representing collections on such Rights to Payment directly to the
Administrative Agent;
 
(k)        ask, demand, collect, receive and give acquittances and receipts for
any and all Rights to Payment of such Grantor, enforce payment or any other
rights in respect of the Rights to Payment and other Collateral, grant consents,
agree to any amendments, modifications or waivers of the agreements and
documents governing such Rights to Payment and other Collateral, and otherwise
file any Claims, take any action or institute, defend, settle or adjust any
actions, suits or proceedings with respect to the Collateral, as the
Administrative Agent may deem necessary or desirable to maintain, preserve and
protect the Collateral, to collect the Collateral or to enforce the rights of
the Administrative Agent with respect to the Collateral;
 
(l)          execute any and all applications, documents, papers and instruments
necessary for the Administrative Agent to use the Intellectual Property
Collateral and grant or issue any exclusive or non-exclusive license or
sublicense with respect to any Intellectual Property Collateral;
 
(m)        execute any and all endorsements, assignments or other documents and
instruments necessary to sell, lease, assign, convey or otherwise transfer title
in or dispose of the Collateral;
 
(n)        execute and deliver to any securities intermediary or other Person
any entitlement order or other notice, document or instrument which the
Administrative Agent may deem necessary or advisable to maintain, protect,
realize upon and preserve the Deposit Accounts and Investment Property of such
Grantor and the Administrative Agent’s security interest therein; and

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(o)          execute any and all such other documents and instruments, and do
any and all acts and things for and on behalf of such Grantor, which the
Administrative Agent may deem necessary or advisable to maintain, protect,
realize upon and preserve the Collateral and the Administrative Agent’s security
interest therein and to accomplish the purposes of this Agreement.
 
The Administrative Agent agrees that, except upon the occurrence and during the
continuation of an Event of Default, it shall not exercise the power of
attorney, or any rights granted to the Administrative Agent, pursuant to clauses
(b) through (o).  The foregoing power of attorney is coupled with an interest
and irrevocable so long as the Lenders have any Commitments or the Secured
Obligations have not been satisfied in full.  Each Grantor hereby ratifies, to
the extent permitted by applicable Law, all that the Administrative Agent shall
lawfully and in good faith do or cause to be done by virtue of and in compliance
with this Section 7.
 
SECTION 8          Administrative Agent Performance of Grantor Obligations.  The
Administrative Agent may (but shall not be obligated to) perform or pay any
obligation which any Grantor has agreed to perform or pay under or in connection
with this Agreement, and such Grantor shall reimburse the Administrative Agent
on demand for any amounts paid, or costs incurred, by the Administrative Agent
pursuant to this Section 8.
 
SECTION 9          Administrative Agent’s Duties.  Notwithstanding any provision
contained in this Agreement, the Administrative Agent shall have no duty to
exercise any of the rights, privileges or powers afforded to it and shall not be
responsible to any Grantor or any other Person for any failure to do so or delay
in doing so.  Beyond the exercise of reasonable care to assure the safe custody
of Collateral in the Administrative Agent’s possession and the accounting for
moneys actually received by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or liability to exercise or preserve any
rights, privileges or powers pertaining to the Collateral.
 
SECTION 10          Remedies.
 
(a)         Remedies.  Upon the occurrence and during the continuation of any
Event of Default, the Administrative Agent shall have, in addition to all other
rights and remedies granted to it in this Agreement, the Credit Agreement, the
Guarantee or any other Loan Document, all rights and remedies of a secured party
under the NY UCC and other applicable Laws.  Without limiting the generality of
the foregoing, each Grantor agrees that:
 
(i)          The Administrative Agent may peaceably and without notice enter any
premises of such Grantor, take possession of any Collateral, remove or dispose
of all or part of the Collateral on any premises of such Grantor or elsewhere,
or, in the case of Equipment, render it nonfunctional, and otherwise collect,
receive, appropriate and realize upon all or any part of the Collateral, and
demand, give receipt for, settle, renew, extend, exchange, compromise, adjust,
or sue for all or any part of the Collateral, as the Administrative Agent may
determine.

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(ii)          The Administrative Agent may require such Grantor to assemble all
or any part of the Collateral and make it available to the Administrative Agent,
at any place and time designated by the Administrative Agent.
 
(iii)         The Administrative Agent may use or transfer any of such Grantor’s
rights and interests in any Intellectual Property Collateral, by license, by
sublicense (to the extent permitted by an applicable license) or otherwise, on
such conditions and in such manner as the Administrative Agent may determine.
 
(iv)         The Administrative Agent may secure the appointment of a receiver
of the Collateral or any part thereof (to the extent and in the manner provided
by applicable Law).
 
(v)          The Administrative Agent may withdraw (or cause to be withdrawn)
any and all funds from any Deposit Accounts, Securities Accounts or Commodity
Accounts.
 
(vi)        The Administrative Agent may sell, resell, lease, use, assign,
transfer or otherwise dispose of any or all of the Collateral in its then
condition or following any commercially reasonable preparation or processing
(utilizing in connection therewith any of such Grantor’s assets, without charge
or liability to the Administrative Agent therefor) at public or private sale, by
one or more Contracts, in one or more parcels, at the same or different times,
for cash or credit or for future delivery without assumption of any credit risk,
all as the Administrative Agent deems advisable; provided, that such Grantor
shall be credited with the net proceeds of sale only when such proceeds are
finally collected by the Administrative Agent.  The Administrative Agent and
each of the other Secured Parties shall have the right upon any such public
sale, and, to the extent permitted by applicable Law, upon any such private
sale, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption, which right or equity of redemption such Grantor
hereby releases, to the extent permitted by applicable Law.  The Administrative
Agent shall give such Grantor such notice of any public or private sale as may
be required by the NY UCC or other applicable Law.  Such Grantor recognizes that
the Administrative Agent may be unable to make a public sale of any or all of
the Pledged Collateral, by reason of prohibitions contained in applicable
securities laws or otherwise, and expressly agrees that a private sale to a
restricted group of purchasers for investment and not with a view to any
distribution thereof shall be considered a commercially reasonable sale.
 
(vii)        Neither the Administrative Agent nor any other Secured Party shall
have any obligation to clean up or otherwise prepare the Collateral for sale. 
The Administrative Agent has no obligation to attempt to satisfy the Secured
Obligations by collecting them from any other Person liable for them and the
Administrative Agent and the other Secured Parties may release, modify or waive
any Collateral provided by any other Person to secure any of the Secured
Obligations, all without affecting the Administrative Agent’s or any other
Secured Party’s rights against such Grantor.  Such Grantor waives any right it
may have to require the Administrative Agent or any other Secured Party to
pursue any third Person for any of the Secured Obligations.  The Administrative
Agent and the other Secured Parties may comply with any applicable state or
federal law requirements in connection with a disposition of the Collateral and
compliance will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral.  The Administrative Agent may sell
the Collateral without giving any warranties as to the Collateral.  The
Administrative Agent may specifically disclaim any warranties of title or the
like.  This procedure will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral.  If the Administrative Agent sells
any of the Collateral upon credit, such Grantor will be credited only with
payments actually made by the purchaser, received by the Administrative Agent
and applied to the indebtedness of the purchaser.  In the event the purchaser
fails to pay for the Collateral, the Administrative Agent may resell the
Collateral and the Grantors shall be credited with the proceeds of the sale.

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(b)          License.  For the purpose of enabling the Administrative Agent to
exercise its rights and remedies under this Section 10 or otherwise in
connection with this Agreement, each Grantor hereby grants to the Administrative
Agent an irrevocable, non-exclusive and assignable license (exercisable without
payment or royalty or other compensation to such Grantor) to use, license or
sublicense any Intellectual Property Collateral.
 
(c)          Application of Proceeds.  The cash proceeds actually received from
the sale or other disposition or collection of any Grantor’s Collateral, and any
other amounts received in respect of such Collateral the application of which is
not otherwise provided for herein, shall be applied as provided in Section
3.03(d) of the Credit Agreement.  Any surplus thereof which exists after payment
and performance in full of the Secured Obligations shall be promptly paid over
to such Grantor or otherwise disposed of in accordance with the NY UCC or other
applicable Law.  Each Grantor shall remain liable to the Administrative Agent
and the other Secured Parties for any deficiency which exists after any sale or
other disposition or collection of Collateral.
 
SECTION 11          Certain Waivers.  Each Grantor waives, to the fullest extent
permitted by applicable Law, (a) any right of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Collateral or other collateral or security for the Secured
Obligations; (b) any right to require the Administrative Agent or the other
Secured Parties (i) to proceed against any Person, (ii) to exhaust any other
collateral or security for any of the Secured Obligations, (iii) to pursue any
remedy in the Administrative Agent’s or any of the other Secured Parties’ power,
or (iv) to make or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Collateral; and (c) all Claims, damages, and demands
against the Administrative Agent or the other Secured Parties arising out of the
repossession, retention, sale or application of the proceeds of any sale of the
Collateral.
 
SECTION 12          Notices.  All notices or other communications hereunder
shall be given in the manner and to the addresses specified in Section 14.02 of
the Credit Agreement.
 
SECTION 13          No Waiver; Cumulative Remedies.  No failure on the part of
the Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights and
remedies under this Agreement are cumulative and not exclusive of any rights,
remedies, powers and privileges that may otherwise be available to the
Administrative Agent or any other Secured Party.

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SECTION 14          Binding Effect.  This Agreement shall be binding upon, inure
to the benefit of and be enforceable by each Grantor, the Administrative Agent,
each Secured Party and their respective successors and permitted assigns and
shall bind any Person who becomes bound as a debtor, agent or secured party to
this Agreement.
 
SECTION 15          Governing Law.  This Agreement and the rights and
obligations of the parties hereunder shall be governed by, and construed in
accordance with, the law of the State of New York, without regard to principles
of conflicts of laws that would result in the application of the laws of any
other jurisdiction; provided that Section 5-1401 of the New York General
Obligations Law shall apply.
 
SECTION 16          Submission to Jurisdiction.
 
(a)          Submission to Jurisdiction.  Each Grantor agrees that any suit,
action or proceeding with respect to this Agreement or any judgment entered by
any court in respect thereof may be brought initially in the federal or state
courts in New York, New York or in the courts of its own corporate domicile and
irrevocably submits to the non-exclusive jurisdiction of each such court for the
purpose of any such suit, action, proceeding or judgment.  This Section 16 is
for the benefit of the Secured Parties only and, as a result, no Secured Party
shall be prevented from taking proceedings in any other courts with
jurisdiction.  To the extent allowed by any Law, the Secured Parties may take
concurrent proceedings in any number of jurisdictions.
 
(b)          Waiver of Venue.  Each Grantor irrevocably waives to the fullest
extent permitted by law any objection that it may now or hereafter have to the
laying of the venue of any suit, action or proceeding arising out of or relating
to this Agreement and hereby further irrevocably waives to the fullest extent
permitted by law any Claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.  A final judgment (in
respect of which time for all appeals has elapsed) in any such suit, action or
proceeding shall be conclusive and may be enforced in any court to the
jurisdiction of which such Obligor is or may be subject, by suit upon judgment.
 
(c)          Service of Process.  Each party hereto irrevocably consents to
service of process in the manner provided for notices in Section 12.  Nothing in
this Agreement will affect the right of any party hereto to serve process in any
other manner permitted by applicable Law.
 
SECTION 17         Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
 
SECTION 18          Entire Agreement; Amendment.  This Agreement and the other
Loan Documents constitute the entire agreement among the parties with respect to
the subject matter hereof and thereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof, including any confidentiality (or similar) agreements.  This Agreement
shall not be amended except by the written agreement of the parties as provided
in the Credit Agreement.

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SECTION 19          Severability.  If any provision hereof is found by a court
to be invalid or unenforceable, to the fullest extent permitted by any Law the
parties agree that such invalidity or unenforceability shall not impair the
validity or enforceability of any other provision hereof.
 
SECTION 20          Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. Delivery of an executed signature page of this Agreement
by facsimile transmission or electronic transmission (in PDF format) shall be
effective as delivery of a manually executed counterpart hereof.
 
SECTION 21          No Inconsistent Requirements.  Each Grantor acknowledges
that this Agreement and the other Loan Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.
 
SECTION 22          Accession.  At such time following the date hereof as any
Person (an “Acceding Grantor”) is required to accede hereto pursuant to the
terms of Section 8.12 of the Credit Agreement, such Acceding Grantor shall
execute and deliver to the Administrative Agent an accession agreement
substantially in the form of Exhibit A (an “Accession Agreement”), signifying
its agreement to be bound by the provisions of this Agreement as a Grantor to
the same extent as if such Acceding Grantor had originally executed this
Agreement as of the date hereof.
 
SECTION 23          Termination.  Upon the termination of the Commitments of the
Lenders and payment and performance in full of all Secured Obligations (other
than Warrant Obligations and contingent indemnification obligations as to which
no Claims have been asserted), the security interests created by this Agreement
shall automatically terminate and the Administrative Agent shall promptly
execute and deliver to each Grantor such documents and instruments reasonably
requested by such Grantor as shall be necessary to evidence the termination of
all security interests given by such Grantor to the Administrative Agent
hereunder.
 
[Remainder of page intentionally left blank; signature pages follow]
 
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.
 

BORROWER:
 
FOAMIX PHARMACEUTICALS INC.

 
By: /s/ David Domzalski

Name: David Domzalski
Title: Chief Executive Officer
 
PARENT GUARANTOR:
 
FOAMIX PHARMACEUTICALS LTD

By: /s/ David Domzalski
Name: David Domzalski
Title:  Chief Executive Officer
 

Signature Page 2 to Security Agreement
 

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ADMINISTRATIVE AGENT:
 
PERCEPTIVE CREDIT HOLDINGS II, LP

By:  PERCEPTIVE CREDIT OPPORTUNITIES GP, LLC, its general partner

 
By: /s/ Sandeep Dixit
Name: Sandeep Dixit
Title: Chief Credit Officer
 
By: /s/ Jim Mannix
Name: Jim Mannix
Title: Chief Operating Officer
 

Signature Page 3 to Security Agreement
 

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